OUE REIT To Divest Crowne Plaza Changi Airport at 1.3% Above Valuation
OUE REIT takes another step in its Phase 3 Value Creation Journey with the proposed S$500 million divestment of Crowne Plaza Changi Airport, at an ~1.3% premium to the average of two independent valuations.
[胜利] In line with our commitment to Unitholders, the Manager intends to distribute S$20.0 million of the net cash proceeds from the transaction.
Following the announcement, DBS Bank, OCBC, Maybank, Lim & Tan, and S&P Global have issued reports on the proposed divestment. We are pleased to share that all covering analysts have maintained their “Buy” ratings, with target prices unchanged.
Key Takeaways:
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Unlocks value from a mature hospitality asset ahead of the expiry of its Hotel Management Agreement and Master Lease Agreement in 2028
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Delivers S$20.0 million special distributions over two years post completion
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Enhances DPU and Yield: Pro forma1 FY 2025 DPU increased by 5.8%, distribution yield at 6.6%
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Strengthens the balance sheet with pro forma aggregate leverage reduced to 36.6%
Mr Han Khim Siew, Chief Executive Officer of the Manager, said, “OUE REIT has a strong track record of disciplined capital allocation, recycling capital from mature assets into higher-quality opportunities. A recent example is the redeployment of capital from the 2024 divestment of Lippo Plaza Shanghai, an ageing short leasehold asset in a challenging market, into 180 George Street in Sydney (also known as Salesforce Tower), a new prime freehold asset with compelling upside potential. The proposed divestment of CPCA builds on this approach by further enhancing our financial flexibility to pursue value-accretive opportunities, strengthen the portfolio and deliver sustainable returns to Unitholders. This is another step in OUE REIT’s Phase 3 Value Creation journey, as we continue to optimise the portfolio and recycle capital with discipline.”
For more information:
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Presentation: https://lnkd.in/gaDYWkxs
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Press Release: https://lnkd.in/g5Trmt8S
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