OUE C-Reit confirms in talks with Allianz entity for OUE Bayfront partial sale

THE manager of OUE Commercial Real Estate Investment Trust (OUE C-Reit) on Thursday noted that there is no certainty any transaction will materialise with regard to its Grade A office asset OUE Bayfront.

The Business Times (BT) had reported in the morning that an entity linked to Allianz Real Estate was in exclusive due diligence with a view to buying a partial stake in the building.

The deal is expected to price the asset - the jewel in OUE C-Reit's crown - at about S$3,200 per square foot (psf) of net lettable area, or S$1.28 billion, BT wrote.

Assuming the potential buyer picks up a half stake, the absolute quantum would come up to around S$640 million, according to the report.

In a bourse filing on Thursday afternoon, the trust's manager said that "while it is currently in exclusivity with an entity linked to Allianz Real Estate with respect to the sale of a partial stake in OUE Bayfront, negotiations between the parties and due diligence by the purchaser are currently still ongoing".

Parties have yet to enter into any binding agreement for such a deal, the manager added.

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It advised unitholders and investors to exercise caution when dealing in units of OUE C-Reit.

The manager will make an announcement if and when there is any material development according to listing rules.

OUE Bayfront is situated along the shoreline of Collyer Quay, overlooking Marina Bay, and its anchor tenants include Bank of America. The 18-storey tower has a net lettable area of 399,824 square feet comprising predominantly offices and a 5 per cent retail component.

It was valued at S$2,954 psf or S$1.18 billion at the end of last year, and OUE C-Reit's asking price for the asset a few months ago was said to be at least S$3,300 psf, BT reported.

Market watchers told BT this week that Allianz may be acting on behalf of the National Pension Service of Korea (NPS) for the possible share purchase.

Another possibility is for the acquisition to be made via the US$2.3 billion property fund set up by Allianz and NPS earlier this year, they said.

Last year, South Korea's NPS bought a half stake in Frasers Tower, a 38-storey office building on Cecil Street, for S$982.5 million.

Units of OUE C-Reit rose S$0.01 or 2.6 per cent to trade at S$0.39 as at 1.49pm on Thursday. Its sponsor OUE Limited's shares were flat at S$1.17.

READ MORE: Allianz-linked entity moves to buy stake in OUE Bayfront