SINGAPORE - OUE Hospitality Trust has agreed to acquire Crowne Plaza Changi Airport and the Crowne Plaza Changi Airport Extension for nearly half a billion dollars.
The manager of the trust said OUE H-Reit will pay $290 million for the 320-room hotel and $205 million for the extension, which is currently under construction.
The extension is an adjacent rooms-only building that is connected to the hotel by a link-way on the second floor of both buildings.
OUE H-Reit is buying the properties from OUE Airport Hotel, a subsidiary of its sponsor, OUE.
This is OUE H-Trust's first acquisition since listing in July 2013.
The extension will add 243 hotel rooms to the integrated complex bringing the total number of rooms to 563.
The construction of CPEX is expected to be completed around end-2015.
The acquisition of the hotel and its extension will be completed in two phases with the purchase price for each phase agreed upfront so as to have greater clarity on the potential returns of the combined hotel property.
The acquisition of Crowne Plaza Changi Airport will be completed first as it is an operating property.
The acquisition of the extension will only be completed around end-2015 after the building has obtained its temporary occupation permit.
OUE H-Reit will be leasing the properties back to the vendor under master lease arrangements upon the completion of the respective acquisition phases.
The combined properties is estimated to yield 4.6 per cent annually.