OUE Commercial REIT and OUE Hospitality Trust have announced plans to merge and become one of the largest diversified REITs in Singapore, with S$6.8bn in total assets.
The proposed deal would see the commercial REIT buy the hospitality REIT’s shares in exchange for S$0.04075 and 1.358 OUE C-REIT shares per stock, the company said in an announcement.
The transaction would significantly increase OUE C-REIT’s market capitalisation to about S$2.9bn and boost its free float of approximately S$1.1bn.
“This transformative merger creates a diversified, sizeable and liquid REIT, which will significantly enhance our visibility within the S-REITs universe and increase our relevance to a wider investor base,” said Tan Shu Lin, CEO of OUE C-REIT’s manager.
“This creates a platform of scale equipped with an enlarged capital base and enhanced financial flexibility to drive long-term growth,” added Chen Yi-Chung Isaac, acting CEO of the manager of OUE H-Trust.
The enlarged REIT would own a portfolio of seven assets comprising about 176,515 sq.m. of office; 28,428 sq.m. of retail; and a 1,640-room hospitality portfolio.
Following the proposed merger, Singaporean real estate group OUE will own a 48.3% stake in the enlarged REIT.
The merger remains subject to shareholder approval.