Is Ho Bee Land keeping a commercial REIT hidden up its sleeve?

Its commercial portfolio stands at over $2b.

Ho Bee Land is most easily associated with its luxury residential developments. Its high-profile residential developments often overshadow its substantial commercial portfolio, which analysts say might eventually be injected into a commercial REIT.

UOB Kay Hian analysts Vikrant Pandey and Derek Chang say that Ho Bee’s commercial portfolio currently stands in excess of $2b, which could well pave the way for a commercial REIT spin-off.

The group’s portfolio was propelled by The Metropolis, which saw valuation gains of $270m as of end-14. Committed occupancy at The Metropolis has reached 98% by NLA, with current asking rents at S$7-8 psf pm.

“With the acquisition of two additional commercial properties in London last year, the possibility of a commercial REIT spin-off looks increasingly distinct. We reckon that future commercial acquisitions are likely to be the tipping point for the establishment of a commercial REIT, with potential significant revaluation gains adding further impetus for capital recycling,” they said.