OUE Hospitality Trust (OUEHT), which owns a
Singapore downtown hotel and shopping mall, opened higher on its
first day of trading in the island state, supported by returns
that exceed those of comparable properties.
The shares opened at 88.5 Singapore cents at 2 p.m. local
time, 0.6 percent higher than the initial stock offering price
of 88 Singapore cents apiece. It swung between gains and losses
in the first 10 minutes of trading. Hospitality Trust sold 681.8
million units at the lower end of its price range.
Overseas Union Enterprise Ltd. (OUE), which is buying
California’s tallest building, raised S$600 million ($473
million) in the initial public offering of its hospitality and
retail assets. OUE follows an IPO of retail assets owned by
Singapore Press Holdings Ltd. (SPH), which raised S$554 million after
pricing at the top of the marketed range. SPH REIT (SPHREIT) jumped 9.4
percent in its trading debut yesterday and was unchanged today.
“Valuations are attractive,” Vikrant Pandey, a Singapore-based analyst at UOB Kay Hian Pte said.
REITs and business trusts were the biggest fundraisers in
Singapore’s initial public offering market in the past year,
accounting for $4.16 billion of the $6.2 billion of stock
priced, according to data compiled by Bloomberg.
At 88 cents, OUE Hospitality Trust is offering a yield of
7.46 percent based on fiscal 2014 projections, according to a
prospectus filed in Singapore. SPH’s yield is projected at 5.79
percent for 2014, based on the 90 Singapore cents IPO price.
Airport Hotel
A business hotel next to the Singapore airport and two
hospitality assets in China, may be offered to OUE Hospitality
Trust, according to the IPO prospectus. The properties, which
have a total valuation of S$413 million as at Dec. 31, could
potentially double the number of hotel rooms owned by the trust,
according to the document.
OUE is controlled by Executive Chairman Stephen Riady, a
son of Mochtar Riady, who controls Indonesia’s Lippo Group.
Lippo’s businesses include real estate, financial services and
food across Asia. The company said earlier this year it’s buying
the U.S. Bank Tower in Los Angeles, the tallest in the West
Coast state, for $367.5 million.
The share sale was managed by Credit Suisse Group AG,
Goldman Sachs Group Inc. and Standard Chartered Plc.
To contact the reporter on this story:
Pooja Thakur in Singapore at
pthakur@bloomberg.net
To contact the editor responsible for this story:
Andreea Papuc at
apapuc1@bloomberg.net
OUE Hospitality Rises in IPO Debut on Yield: Singapore Mover
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