OUE Commercial Trust mulls offering 6.8pct dividend yield for $315M IPO-sources

By Nicel Jane Avellana

Jan 09, 2014 12:53 AM EST

Two sources told Bloomberg that Overseas Union Enterprise (OUE) Commercial Trust intends to offer a yield of 6.8% for its $315 million or S$400 million initial public offering. OUE Commercial trust is a spinoff from OUE Ltd, a Singapore-based company that operates as a diversified real estate owner, developer and operator. The businesses of OUE Ltd are focused in the commercial, retail, hospitality and residential sectors.

The people with knowledge of the matter said the commercial real estate investment trust plans to start marketing the deal next week. They spoke on the condition of anonymity because the process is private. Backed by properties which include the 18-storey OUE Bayfront office tower located in downtown Singapore, OUE Commercial Trust intends to sell the units at 80 Singapore cents each, the sources said.

Citing a stock exchange filing, a Channel NewsAsia report on October 17, 2013 also said that OUE Commercial Trust planned to buy the 36-storey Lippo Plaza in Shanghai from Lippo China Resources, a Hong Kong-listed company.

For this year, OUE Commercial Trust plans to offer a 6.8% dividend yield and for fiscal year 2015, it intends to give a 6.9% dividend yield, the people said.

This will be the second trust that OUE has listed in the past six month. In July last year, OUE Hospitality Trust was able to gather S$600 million when it went public. The report said units of OUE Hospitality Trust have remained unchanged since they began trading.

Last year, OUE agreed to purchase California's tallest building, the US Bank Tower in Los Angeles. That deal was worth $367.5 million. Executive Chairman Stephen Riady also controls OUE. He is the son of Mochtar Riady, the founder of Lippo Group. Based in Indonesia, the businesses of Lippo Group includes real estate, financial services and food all over Asia. 

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