OUE Reit confirms IOI Properties, CapitaLand in talks for One Raffles Place, says no binding deal reached yet
The manager adds there is no certainty that the transaction will materialise following the joint bid
[SINGAPORE] OUE Real Estate Investment Trust ( OUE Reit ) on Thursday (Oct 8) confirmed it was in exclusive talks with IOI Properties Group and CapitaLand Investment (CLI) over the sale of its One Raffles Place property, clarifying that no binding agreement has yet been executed.
In a regulatory filing, the Reit manager responded to a report in The Business Times, which said that IOI Properties and CLI were moving closer to an acquisition of the prime Central Business District asset and were in the process of exclusive due diligence.
“OUE Reit is currently in exclusivity with entities linked to IOI Properties and CapitaLand Investment with respect to the sale of the property,” the manager noted.
“Negotiations between the parties and due diligence by the purchasers are currently still ongoing, and parties have yet to enter into any binding agreement for the sale.”
It added that “there is no certainty that any transaction will materialise”.
The disclosure follows comments made in a BT interview with IOI Properties group CEO Lee Yeow Seng on the sidelines of the Forbes Global CEO Conference on Wednesday.
Lee told BT that a 50-50 joint bid submitted about three months ago had been accepted for exclusive due diligence by the asset’s owners, OUE Reit and UOB .
“Right now, we have entered into exclusivity, and we are starting to do due diligence, and we are in the midst of discussing the final terms on the sales and purchase agreement,” he said.
Market estimates place the indicative value of the prime commercial property at between S$2.3 billion and S$2.4 billion.
OUB Centre, an indirect subsidiary of OUE Reit, holds 81.54 per cent interest in the property.
Prime commercial property: One Raffles Place
One Raffles Place comprises a 62-storey office tower, a 38-storey office tower and a six-level retail podium, spanning about 875,000 square feet in net lettable area.
The site sits on four land parcels – three held on 99-year leasehold terms, and one on an 841-year leasehold tenure dating from November 1985.
In the interview, Lee outlined initial plans for the site.
“The first thing we will do after we acquire the assets is to improve on the tenancy mix in the retail podium,” he said, noting strong demand for F&B offerings among downtown workers.
A successful acquisition would deepen IOI Properties’ commercial footprint in Singapore, adding to a portfolio that includes IOI Central Boulevard Towers, South Beach and Shenton House.
Units of OUE Reit declined 1.5 per cent or S$0.005 to close at S$0.34 on Thursday.
Shares of CapitaLand Investment fell 1.2 per cent to close S$0.03 lower at S$2.46.
Shares of IOI Properties Group rose 2.4 per cent or RM0.08 to close at RM3.38.
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Copyright SPH Media. All rights reserved.
