OUE C-Reit, H-Trust merger goes into effect, creating $6.9b Reit

The merger of OUE Commercial Real Estate Investment Trust and OUE Hospitality Trust will create one of the largest diversified Singapore real estate investment trusts. Its portfolio will comprise seven properties across the office, retail and hospita
The merger of OUE Commercial Real Estate Investment Trust and OUE Hospitality Trust will create one of the largest diversified Singapore real estate investment trusts. Its portfolio will comprise seven properties across the office, retail and hospitality sectors, including Mandarin Gallery.PHOTO: OUE

The merger of OUE Commercial Real Estate Investment Trust (C-Reit) and OUE Hospitality Trust (H-Trust) was completed yesterday.

This came after the trust scheme of arrangement was approved by investors in both trusts and the High Court's sanction last month.

H-Trust stapled security holders will receive payment of the scheme consideration - 4.075 cents in cash and 1.3583 new C-Reit units per stapled security - by Monday.

H-Trust stapled securities will then be delisted on Sept 17. Their last day of trading was last Friday.

The merger will create one of the largest diversified Singapore real estate investment trusts (S-Reits), with total assets of about $6.9 billion.

Its portfolio will comprise seven properties across the office, retail and hospitality sectors, including OUE Bayfront, One Raffles Place and high-end mall Mandarin Gallery.

It also owns Lippo Plaza in Shanghai and two hotels, Mandarin Orchard Singapore and Crowne Plaza Changi Airport.

The enlarged Reit's investment horizon will be broadened to span commercial, hospitality and integrated developments, giving the manager greater flexibility to grow the portfolio.

The enlarged Reit's investment horizon will be broadened to span commercial, hospitality and integrated developments, giving the manager greater flexibility to grow the portfolio.

After the merger is complete, the enlarged Reit's market capitalisation will increase significantly to about $2.9 billion.

This makes it one of the largest S-Reits and is expected to drive higher trading liquidity, which could lead to a wider investor base, said the managers of C-Reit and H-Trust.

A version of this article appeared in the print edition of The Straits Times on September 05, 2019, with the headline 'OUE C-Reit, H-Trust merger goes into effect, creating $6.9b Reit'. Print Edition | Subscribe