OUE Commercial REIT and OUE Hospitality Trust is merging. Here are some quick thoughts.

$OUE Com Reit(TS0U.SI) $OUE HTrust(SK7.SI) $OUE(LJ3.SI)

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Management lousy, just issue right, now another round, just within few months only..


i agree that given the high debt profile, another round of rights issue is almost plausible


Side note, OUE (LJ3) investable?


trust not -- I avoid his counters


Thanks for sharing. Agree with you that this deal is highly dilutive for OUE C-reit. I wonder why management is screwing their unitholders over and over again. Imo, the earlier rights issue was already grossly mispriced and now this deal again.


Let me share my perspective of this deal. Both OUECT & OUEHT are relatively small sized Reits, this poses many problems & disadvantages when it comes to financing, operating expenses & future growth of the Reit etc. Merging the 2 Reits will mitigate if not solve most of these issues & make the enlarged Reit more resilient, increase trading liquidity & make it a potential candidate for index inclusion. I do not agree with your view that OUECT unit holders are being shafted again. Granted there is a decline in NAV , but this is the premium to pay to secure a better growth trajectory for OUECT. Do you seriously believe unit holders of OUEHT will agree to sell their units without a slight premium? The sponsor has a significant 48.3% stake in the enlarged Reit, I don't think they would shoot themselves in the foot. Ever since the badly managed acquisition of downtown & the rights issue, OUECT's share price has been hammered severely. For serious long term investors, I would like to highlight that the properties the enlarged Reit own are all high quality assets in very prime localities & these have value.....


Reply to @risknreturns : Thanks for sharing your views. I'm a long term dividend investor so I viiew this with a long term perspective. Notwithstanding the immediate dilution to NAV, the medium to long term benefits outweigh the dilution. The properties of the enlarged Reit are all hgh quality assets in very prime locations. Given time & good management, they would yield good returns & this would help in the recuperation of it's NAV. The Singapore office & hospitality market is currently on an uptrend, if management bide their time & not be in a haste to expand further, the expected growth in NPI would help OUECT regain it's lost NAV. With the increase in it's size, it would enter the radar coverage of institutional investors & this would help to rerate the stock. My 2 kachang putehs...

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