OUE sells hotel and serviced residence businesses for $289m

Both components will be bought by DHI Holding.

OUE has signed deals to divest its 268-room hotel and serviced residences OUE Downtown Serviced Apartments for a total purchase consideration of $289m, according to an exchange filing.

Alkas Realty, an indirect wholly-owned subsidiary of the firm, will sell its luxury serviced residences Oakwood Premier OUE Singapore to DHI Holding (S) for $287m, including all plant, machinery and equipment located in the property.

Meanwhile, the second sale involves group’s direct wholly-owned subsidiary OUE Downtown (OUEDTPL) that will divest its hotel component and assets to DHI Downtown for $1.9m.

OUE assured that both transactions are not expected to have a material effect on the net tangible assets or earnings per share for the financial year ending 31 December.

Before the two deals, OUE attempted to sell its serviced apartments to OUE Hospitality Trust (OUE H-Trust). The latter firm refused as “acquiring Oakwood Premier OUE Singapore based on the proposed terms would not be accretive to OUE CREIT’s distribution per unit.”