OUE Hospitality Trust *Official* (SGX: SK7)

[koxinga]

Coming soon. At least we now know it will include Mandarin Gallery and Mandarin Orchard. No surprise but will be waiting to see how much they intent to price it.

Announcement

Valuation of Assets at 31 Dec 2012

 

[nothinisimpossiblewiftime]

seems like a zhup pa lang reit wor

office, hotel, service apartment, retail

 

[SpinFire]

Finally some updates on this. Hope it'll offer some decent yield, maybe 5-6%.


Hmm... got 2 assets in China.

 

[Carnage]

With the exception of the Chinese properties, it seems like the rest of the commercial properties are Grade A quality.

Wasn't there a analyst report that mentioned that hospitality sector would be muted in years to come as more and more hotels come online?

 

[Paul Lee]

I wish they would include more properties into the REIT. Mandarin Gallery and Mandarin Orchard are ok assets but those are 99 years leasehold properties with only 43 years left on the lease.

So personally I would demand a much higher yield. But I will wait for more info on how the REIT will be structured, who is the manager and how much stake OUE will retain and if they will remain a sponsor.

 

[Paul Lee]

seems like a zhup pa lang reit wor

office, hotel, service apartment, retail

How is it zhup pa lang when they are only including the hotel assets into the REIT?

 

[Carnage]

I wish they would include more properties into the REIT. Mandarin Gallery and Mandarin Orchard are ok assets but those are 99 years leasehold properties with only 43 years left on the lease.

So personally I would demand a much higher yield. But I will wait for more info on how the REIT will be structured, who is the manager and how much stake OUE will retain and if they will remain a sponsor.

High yield will be crystallised in the form of stapled securities, will you still subscribe?

My bet is that they will structure it based on what AHT did.

Paul, with regards to their lease life are you worried of capital performance down the road? Because I cannot relate how lease will affect a REIT's DPU unless customers really kay kao the hotel is older than it looks.

 

[MikeL09]

Wasn't there a analyst report that mentioned that hospitality sector would be muted in years to come as more and more hotels come online?

Think I heard something like that too.

On the other hand, there was also the CNA business news last night that said hospitality and tourism industry will benefit from the world tennis sporting event that is coming to Singapore from 2014 to 2018...that is set to rival and outdo F1 by bringing in 100,000 visitors.

 

[koxinga]

How is it zhup pa lang when they are only including the hotel assets into the REIT?

They left out Crowne Plaza leh. So dunno whether is this considered a retail play or a hospitality play. If office play, then must add other assets.

 

[Carnage]

They left out Crowne Plaza leh. So dunno whether is this considered a retail play or a hospitality play. If office play, then must add other assets.

Crowne Plaza Changi Airport.

Not obvious enough?

 

[Paul Lee]

High yield will be crystallised in the form of stapled securities, will you still subscribe?

My bet is that they will structure it based on what AHT did.

Paul, with regards to their lease life are you worried of capital performance down the road? Because I cannot relate how lease will affect a REIT's DPU unless customers really kay kao the hotel is older than it looks.

I dun like to speculate until I see the prospectus. So can't/don't really comment much for now.

2 things can happen when the lease on the land expires. #1 The govt takes back the land and the REIT is left with nothing (and probably a giant bill to tear down the building and restore the land back to the original state) #2 The lease may be top up by paying the govt the appropriate levy.

Either case will entail money; so end up the REIT will have to finance those cost in some way. So it will have to take on more debt or do equity fund raising. This is why I'm a little wary. Most sg REIT properties dun have such short lease IIRC.

 

[koxinga]

Crowne Plaza Changi Airport.

Not obvious enough?

Crown Plaza Changi is left out as of now and the two assets to be injected are Mandarin Gallery (retail) and Mandarin Orchard (hospitality). Of course, things might change down the road.

 

[Arsene_Wenger]

I dun like to speculate until I see the prospectus. So can't/don't really comment much for now.

2 things can happen when the lease on the land expires. #1 The govt takes back the land and the REIT is left with nothing (and probably a giant bill to tear down the building and restore the land back to the original state) #2 The lease may be top up by paying the govt the appropriate levy.

Either case will entail money; so end up the REIT will have to finance those cost in some way. So it will have to take on more debt or do equity fund raising. This is why I'm a little wary. Most sg REIT properties dun have such short lease IIRC.

Likely i will be gone even before the lease of most reit expired.

But reit still has its potential downside when it get too hot.

 

[Carnage]

Crown Plaza Changi is left out as of now and the two assets to be injected are Mandarin Gallery (retail) and Mandarin Orchard (hospitality). Of course, things might change down the road.

What? Only these 2?

Then not very feasible. The footfalls at Mandarin Gallery is already very bad, there are better retail malls. I'm not sure about Mandarin Orchard's occupancy rates.

 

[koxinga]

What? Only these 2?

Then not very feasible. The footfalls at Mandarin Gallery is already very bad, there are better retail malls. I'm not sure about Mandarin Orchard's occupancy rates.

Aiyah, the proposed SPH Reit also two if I am not wrong. At least they got a pipeline of potential assets to inject into

But yah, just surprise that only these two for now. I guess we wait for the prospectus to come out first.

 

[princessreiko]

In summary, from the info given:

Remaining no. of years

Mandarin Gallery - 43 years

OUE Bayfront - 93 years

OUE Tower - 93 years

OUE Link - 12 years

6 Shenton Way - 53 years
Towers One & Two

Mandarin Orchard - 43 years

Crowne Plaza - 70 years

Meritus Mandarin - 46 years
Haikou

Meritus Shantou - 34 years

Cavenagh House and Roche Building are freehold.

 

[Opps-gal]

How many % is hotel? When is the reit opening

 

[jgyy1990]

seems that O.U.E Link will end at 2025. but how much will the share price drops by 2025?

 

[IAmARobot]

"More than 500 DBS Bank staff clamoured to bid farewell to their office in Shenton Way as the bank made the official move to its new premises at the Marina Bay Financial Centre (MBFC) on Friday"

DBS Bank staff say goodbye to Shenton Way office

looks like the occupancy in 6 shenton way tower 1 and tower 2 is quite low

 

[Carnage]

Aiyah, the proposed SPH Reit also two if I am not wrong. At least they got a pipeline of potential assets to inject into

But yah, just surprise that only these two for now. I guess we wait for the prospectus to come out first.

Yes, but the SPH reit is so much better quality assets.

Paragon and Clementi Mall is really sedap!