OUE Commercial REIT Management Pte. Ltd. bags SBR Listed Companies Awards for Real Estate

The company emerged as the 4th largest diversified REIT after its merger with OUE Hospitality Trust.

OUE Commercial Real Estate Investment Trust (OUE C-REIT) successfully completed a transformational merger in 2019 with OUE Hospitality Trust (OUE H-Trust) to become the 4th largest diversified real estate investment trust (REIT) listed on the Singapore Exchange Securities Trading Limited (SGX-ST).

With the combination of portfolios, OUE C-REIT’s total assets-under-management (AUM) stands at $6.8b as at 30 June, from $4.5b previously, comprising seven high-quality prime assets across the commercial and hospitality segments in Singapore and Shanghai.

Because of these achievements, OUE C-REIT has received the Singapore Business Review’s Listed Companies Awards for Real Estate category. The awards programme recognises innovative projects and best practices with significant business impact.

Post-merger, OUE C-REIT’s higher market capitalisation, greater trading liquidity and larger asset base have resulted in the REIT’s increased visibility and relevance in the investment community.

The more diversified portfolio also reduces the concentration risk associated with exposure to any single real estate class or asset, enhancing the resilience and stability of OUE C-REIT’s income. As at 30 June, no single asset represents more than 28% of the total portfolio, compared to 40% prior to the merger. The stability of OUE C-REIT’s income is also underpinned by resilient operating performance in the commercial segment, which recorded positive office rental reversions for the Singapore properties in 2019 and H1 2020.

Beyond a more diversified portfolio, the broadened investment mandate following the merger accords OUE C-REIT greater flexibility when assessing investment targets. From being able to only invest in standalone commercial assets, the REIT is now able to target hospitality assets and integrated developments.

With a larger capital base, OUE C-REIT has access to more competitive sources of capital, can undertake larger asset enhancement initiatives, respond with greater speed to potential acquisitions and consider portfolio reconstitution opportunities to enhance its portfolio and grow the REIT for the benefit of Unitholders.

For instance, the REIT is capitalising on the current weak hospitality operating environment to rebrand its Mandarin Orchard Singapore to Hilton Singapore Orchard as announced in March. This asset enhancement initiative will add new income-generating spaces to drive growth in sustainable returns and value for Unitholders, and allow the revamped hotel to leverage on Hilton’s strong brand recognition and global sales and distribution network. The rebranded hotel is set to become Hilton’s flagship in Singapore and the largest Hilton hotel in Asia-Pacific when it reopens in 2022.

DBS Research’s Derek Tan and Rachel Tan commented that the combination of OUE C-REIT and OUE Hospitality Trust is a bold step but potentially a necessary one in an era where “big is beautiful” amongst the Singapore-listed real estate investment trusts.

Watch the interview below to know more about their winning project: