The board of directors of OUE Commercial REIT Management Pte. Ltd., in its capacity as manager



 

of OUE C-REIT (the " Manager?) wishes to announce that in connection with the Offering, and for

 

 

the purpose of Regulation 3A(2)(g) of the Securities and Futures (Market Conduct) (Exemptions)

Regulations 2006, Clifford Development Pte. Ltd. has granted the Joint Bookrunners, the

Over-Allotment Option, exercisable by Standard Chartered Bank, Singapore Branch (the



 

" Stabilising Manager" ) (or any of its affiliates or other persons acting on behalf of the Stabilising

 

 

Manager), in consultation with the other Joint Bookrunners, in full or in part, on one or more

occasions, only from the date of admission of OUE C-REIT to the Official List of the Singapore



 

Exchange Securities Trading Limited (the ?SGX-ST?) (the " Listing Date" ) but no later than the

earlier of (i) the date falling 30 days from the Listing Date, or (ii) the date when the Stabilising

Manager (or any of its affiliates or other persons acting on behalf of the Stabilising Manager) has

bought, on the SGX-ST, an aggregate of 41,600,000 Units, representing 20% of the total number of

Units in the Offering, to undertake stabilising actions to purchase up to an aggregate of 41,600,000

Units (representing 20% of the total number of Units in the Offering) at the Offering Price. The

exercise of the Over-Allotment Option will not increase the total number of Units outstanding.

In connection with the Offering, the Stabilising Manager (or any of its affiliates or other persons

acting on behalf of the Stabilising Manager) may, in consultation with the other Joint Bookrunners

and at its discretion, over-allot or effect transactions which stabilise or maintain the market price of

the Units at levels that might not otherwise prevail in the open market. However, there is no

assurance that the Stabilising Manager (or any of its affiliates or other persons acting on behalf of

the Stabilising Manager) will undertake stabilising action. Such transactions may be effected on the

SGX-ST and in other jurisdictions where it is permissible to do so, in each case in compliance with

all applicable laws and regulations, including the Securities and Futures Act, Chapter 289 of



Singapore, and any regulations thereunder.

 

 

 

OUE COMMERCIAL REAL ESTATE INVESTMENT TRUST, FIRST MAIN BOARD IPO OF THE YEAR, ATTRACTS

STRONG RESPONSE FROM INVESTORS

 Public Offer of 56,250,000 Units 4.76 times subscribed by retail investors

 Placement Tranche of 151,750,000 Units fully subscribed on the back of strong demand from institutional and other investors

 Expects to commence trading on the Main Board of the Singapore Exchange Securities Trading Limited (the " SGX-ST" ) on 27 January 2014 at 2.00 p.m.

Singapore, 24 January 2014 ? OUE Commercial Real Estate Investment Trust (" OUE C-REIT" ), a Singapore REIT established with the principal investment strategy of investing in a portfolio of income-producing real estate used primarily for commercial purposes in financial and business hubs within and outside of Singapore, has garnered strong support from investors for its initial public offering of 208,000,000 Units (the " Offering" ).

  Stocks with special dividend potential

Company /TP/ Rating / Div yield %(FY14 FY15  ) / PE (x) /(DB EPS)(FY14 FY15  ) / PB (x)(FY14 FY15  ) / ROE %(FY14 FY15  )

City Developments/ 10.55/ Hold/ 1.4 1.4/ 14.2 12.7 /1.0 1.0 /7.8 8.2

M1 /3.72/ Buy/ 5.1 5.9 /16.6 14.4/ 7.3 6.8 /44.6 48.8

OUE/ 2.76 /Buy /2.4 2.4/ 28.2 23.0/ 0.5 0.5/ 1.9 2.4

SATS/ 3.54/ Buy/ 4.4 5.0 /17.0 15.2 /2.5 2.3 /14.7 15.8

Singapore Airlines /8.80/ Sell/ 3.2 3.0/ 27.0 27.1/ 0.9 0.9 /3.6 3.4

Source: Deutsche Bank

Written By Stock Fanatic on Wednesday, January 22, 2014

Share price forecast

The 15 analysts offering 12 month price targets for OUE Ltd have a median target of 298.00, with a high estimate of 367.00 and a low estimate of 257.00. The median estimate represents a 21.14% increase from the last price of 246.00.

High +14,698.4 % 367.00 Med +11,916.1 % 298.00 Low +10,262.9 % 257.00

Written By Stock Fanatic on Monday, January 20, 2014

OUE Commercial Real Estate Investment Trust (OUE C-REIT) is launching its IPO at an offer price of S$0.80 per unit. We highlight the key considerations below for investors.

Portfolio

■ The initial portfolio of OUE C-REIT comprises two commercial properties, namely OUE Bayfront and Lippo Plaza that are located in Singapore and Shanghai with an aggregate GFA of about 105,296.1 sq m and a total appraised value of S$1,623.6 mln as at Sept 2013. The overall committed occupancy rates for the OUE Bayfront and Lippo Plaza were 96.1% and 88.2% respectively.

Sponsor

■ OUE C-REIT is backed by OUE - a diversified real estate developer owned by Indonesia?s Lippo Group. The Sponsor will hold a 45.2% stake in OUE C-REIT post-listing (assuming the Over-allotment Option is exercised in full). 

The sponsor has also granted a right of first refusal (ROFR) over its income-producing properties including 

i) One Raffles Place  

ii) OUE Downtown 2 and Downtown Gallery and 

iii) U.S. Bank Tower. 

This will provide OUE C-REIT with access to a visible acquisition pipeline and increase its IPO portfolio GFA to over 4.5 times when acquired.

Yield & Valuation

■ We note that the Sponsor will provide income support to OUE C-REIT for a period of 5-year from the listing date. Based on the offering price of S$0.80, this translates to:

FY14 projected yield : 6.80%

FY15 projected yield : 6.89%

Discount to NAV : 23.9%

■ Aggregate gearing / Avg cost of debt H? : 42.3% / 2.5% per annum

IPO STATISTICS
Sponsor:	Overseas Union Enterprise Limited (OUE)
Lead Manager:	Standard Chartered, CIMB & OCBC Bank
Joint Global Coordinator and Issue Managers:	Citi, J.P. Morgan & OSK/DMG
Prospectus:	Click here
Offer Price:	S$0.80 per unit
Offering Size:	208mln Units (subject to Over-Allotment Option), comprising Placement Tranche of 151.75 mln Units Public Offer of 56.25 mln Units
Market Capitalisation:	S$1.39 billion based on IPO price
2014 projected yield:	6.8%
2015 projected yield:	6.89%
Aggregate Gearing:	42.3%
Initial Properties:	1) Singapore OUE Bayfront 2) Shanghai Lippo Plaza Property
Listing status:	Mainboard of Singapore Stock Exchange (?SGX?)
Indicative IPO Timetable :
Open (Public Application):	Friday, 17 January 2014, 5:00 pm
Closing (Public Application):	Thursday, 23 January 2014, 12:00 noon
SGX-ST trading Commencement:	Monday, 27 January 2014, 9:00 am (on ?ready? basis)

Use Of Proceeds

■ The total gross proceeds of about S$346.4 mln will be mainly used for the acquisition of the IPO Portfolio, repayment of the Existing Offshore Facilities, refinancing the Existing Onshore Facility, transaction costs as well as working capital purposes.

Our View

■ Despite the high headline yield, we note that FY14 and FY15 distribution yield would have been lower at 5.56% and 5.75% respectively if excluding the effects of the income support arrangement. Moreover, with interest rates set to rise, we could see higher borrowing cost when most of its debts mature in 2017. In our view, this could partially offset any potential growth in DPU.

■ We are also concerned with its relatively high gearing ratio of 42.3% as OUE C-REIT may have to resort to equity fund raising either in the form of a rights issue or private placements for any future acquisitions.

Key Risks

■ Downside includes concentration risk i.e heavily reliant on OUE Bayfront for about 67% of its gross revenue non-renewal of leases/loss of key tenants/negative rental reversion as well as borrowing limitation.

Cornerstone Investors

■ Summit SPV, Mr Gordan Tang, Mdm Chen Huaidan, Mr Yang Dehe and RHB Asset Management

 

Recommendation: ACCUMULATE

Previous Close: S$ 2.48

Fair Value: S$ 2.78

·                  OUE Commercial REIT lodged preliminary prospectus with MAS

·                  Initial Portfolio ? The OUE Bayfront Property and The Lippo Plaza Property

·                  IPO to raise S$346 million

·                  Indicative Distribution Yield of 6.8% in 2014, 6.89% in 2015

·                  Maintain Accumulate Rating with revised TP $2.78

Phillip   

preview.

Upcoming implementation of FRS 110 requires developers to consolidate REITs onto

their balance sheets as they are deemed to have control over REITs. Overall financial

impact is not expected to be significant, although key impact would be on higher debt

and asset levels, leading to deterioration in gearing and debt ratios. Developers

impacted include CapitaLand, City Developments, ARA Asset Management and Keppel

Land.

Maintain OVERWEIGHT as the market has priced in an overly bearish scenario for

property and REITs stocks on expectations of a rise in interest rates with the Fed

tapering. Tapering will have minimal impact on short-term rates and we expect a growth

pick-up to offset a rise in long-term rates. We are already factoring in a 3% rate for bond

yields (60bp higher than the current yields of 2.4%) and we are also expecting property

prices to fall 5-10% in 2014, with volumes to moderate 20-30%. We prefer diversified,

deep-value developers and high-beta REITs in the office space with OUE, Ho Bee and

CapitaCommercial Trust (CCT) as our top BUYs.