OUE ‘testing waters for commercial REIT IPO’

SINGAPORE — Singapore-listed hotel and property group OUE, controlled by Indonesia’s Riady family, has started testing investors’ appetite for an offering of commercial real-estate assets in Shanghai and Singapore that could raise up to US$500 million (S$634 million), those with knowledge of the deal said yesterday.

OUE is seeking to offer a yield of 6.8 per cent a year and is aiming to list the real-estate investment trust (REIT) later this month in Singapore, said one of the people. The firm announced on Friday that it had received approval from the Singapore Exchange (SGX) for the listing of the OUE Commercial Real Estate Investment Trust.

It previously said the REIT would likely include OUE Bayfront, an 18-storey Grade A office building located in Collyer Quay and the Lippo Plaza Property in Shanghai.

OUE’s listing of its commercial operations in a REIT would be its second Singapore IPO in six months. In July last year, it raised about S$600 million from a REIT listing of its five-star Mandarin Orchard hotel and adjoining Mandarin Gallery shopping mall. OUE declined to comment yesterday.

If successful, the commercial REIT IPO will also be the first listing in Singapore for the year and will add to the Republic’s profile as a destination for trust listings.

The SGX is home to nearly 50 trusts with a combined market capitalisation of about US$65 billion. A unit of local conglomerate Keppel Corp last week announced plans to list its data centres in Singapore through a REIT.

These planned listings, slated for this quarter, offer attractive yields at a time when interest rates remain low by historical standards, despite the US Federal Reserve starting to wind down its monetary stimulus. Agencies