Singapore’s OUE Commercial REIT Plans To Buy Office Bldgs Abroad

SINGAPORE – Following the completion of the S$634 million sale of a 50 percent stake in OUE Bayfront in March 2021, the manager of OUE Commercial Real Estate Investment Trust (REIT) revealed that they intend to acquire more overseas assets, particularly office properties in Sydney, Melbourne, and London, reported The Business Times on Monday morning (9 May, SGT).

“These are key gateway markets with a lot of liquidity for transactions in the S$200 million to S$400 million range, so you can enter and exit the market fairly quickly,” explained Han Khim Siew, Chief Executive of OUE Commercial REIT Management.

“The UK and Australia also have very good market transparency and governance.” OUE Commercial REIT is targeting office properties in the aforementioned cities (with some supporting retail if any), but is unlikely to purchase purely retail assets. As for hospitality assets, the trust plans to look at them selectively, he added.

Notably, only one of the seven assets owned by the Singapore-listed REIT is located in another country, and all existing properties were injected by the sponsor of the trust, OUE. As for the future overseas acquisitions, the REIT is looking to acquire the assets from third parties.

Still, OUE Commercial Real Estate Investment Trust wants to keep the majority of its asset composition in Singapore.

For the fiscal year ended 31 December 2021, 90 percent of the REIT’s revenue came from the city-state. Specifically, 15 percent of its top line were derived from retail assets, around 25 percent from hotels, while nearly 60 percent were obtained from office properties.

Looking ahead, Han is bullish on the prospects for the different types of commercial real estate (CRE) in the Singapore market that OUE Commercial REIT is involved in.

“The office market has bottomed and it is picking up. Our retail and hotel assets will benefit from the opening of the borders and loosening of COVID restrictions,” added Han.