OUE makes strategic move to buy DBS Towers

The integrated developer eyes opportunities as it proposes to acquire the iconic towers for S$870.5 million.

Overseas Union Enterprise Limited (OUE) announced that its subsidiary, Total Apex Limited (APEX) has entered into a conditional sale & purchase agreement to acquire the 99-year leasehold DBS Towers One and Two for S$870.5 million, according to an OUE release on Wednesday.

DBS Towers is a prime office building located in Shenton Way, at the heart of Singapore’s Central Business District.

OUE Executive Chairman Stephen T. Riady said, “This valuable addition is in line with our strategic goal of leveraging our local market expertise to maximize exciting investment opportunities from high-yield properties and landmark assets in Singapore. Our multiplatform approach to property development places us in a unique position to enhance the long-term sustainability of our business grounded on the growth of rental income stream from our high quality, actively managed portfolio.”

According to the release, DBS Towers is close to the Marina Bay area, with opportunities for development into a global city for “Work, Live and Play.” The commercial landscape and inner-city living in this area are set to be transformed by the vibrant activities with the addition of a host of convention, leisure, commercial and entertainment facilities like the Integrated Resort, water promenade and Gardens by the Bay. This gives rise to asset enhancement potentials in DBS Towers, a development strategically located in this corridor of exciting opportunities.

Built in 1975, DBS Tower One used to be the tallest building in Singapore and the first to incorporate a covered walkway around the entire city block. Together with DBS Tower Two, the 37-storey skyscraper comprises a total gross floor area (GFA) of approximately 1,239,642 sq ft. Both towers are currently fully leased, OUE said.

Coupled with the limited new supply of office space in 2013 and 2014, prime office rents are expected to rise over the next few years. DBS Towers, being in the heart of CBD, is poised to benefit from organic growth via positive rental reversions.

Standard Chartered Bank is set to be OUE’s financial advisor for the acquisition.