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OUE exploring setting
up of listed property trust
Posted by luxuryasiahome on September 18, 2008
Plan to inject certain hospitality assets; it has appointed
professional advisers
OVERSEAS Union Enterprise (OUE) said yesterday that it is
looking at setting up a listed property trust into which it will
inject ‘certain hospitality properties’.
Professional advisers have been appointed to assist, OUE said in
a filing to the Singapore Exchange.
In Singapore, OUE has Meritus Mandarin Singapore and Marina
Mandarin Singapore. It also has a beach resort and spa in
Malaysia and three hospitality assets in China.
There is no certainty that a listed property trust will be
established or that any transaction relating to or involving the
company or its subsidiaries will be entered into as a result,
OUE said.
‘Shareholders should bear the foregoing in mind when dealing in
the shares of the company,’ it said.
OUE, controlled jointly by Malaysian tycoon T Ananda Krishnan
and Indonesia’s Lippo Group, said that if it does enter into any
definitive transaction relating to a listed property trust, it
will make a prompt announcement.
OUE has chosen a ’strange time’ to look at listing a real estate
investment trust (Reit), a property analyst said yesterday,
saying the current market turmoil means new listings are bound
to be poorly received.
But if OUE ‘takes its time to make up its mind’, market
conditions might have improved by the time the trust makes it to
the market, the analyst added.
Singapore-listed Reits, or S-Reits, are beginning to look
attractive compared with developer stocks, some analysts have
said lately.
DBS Vickers Research said this month that the share prices of S-Reits
have fallen since the start of the Q2 2008 reporting season in
July, in tandem with the decline in broader Singapore market.
But the Reit index has done better than developers, the research
unit said in a report.
Similarly, in a Sept 16 report DMG & Partners property analyst
Brandon Lee said he prefers S-Reits to developers.
He cited the ‘constant ammunition of negative newsflow currently
being fired at developers’ as one reason for this.
‘In the near term, we are still recommending the S-Reits, for
their earnings visibility and income predictability, as well as
higher yields with the recent correction in share prices,’ he
said.
Source : Business Times - 18 Sep 2008
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