RETAIL MARKET
Mandarin Orchard, Gallery attract buyer
A sale could OVERSEAS Union Enterprise, the Lippo Group's Singapore property arm, has been approached by a potential buyer to purchase an Orchard Road hotel and mall, valued at $1.7 billion.
Shares of OUE, as the company is known, jumped 13 per cent to $2.95 at the close of trading in Singapore, their biggest advance since March 9, 2010, after The Business Times reported the company received interest from a potential buyer for the Mandarin Orchard hotel and the adjoining Mandarin Gallery along the shopping strip.
OUE has offered a potential buyer exclusivity to conduct preliminary due diligence on Mandarin Orchard Singapore, the 1,051-room hotel, and Mandarin Gallery, the company said in a statement to the Singapore Exchange.
The two properties were valued at $1.7 billion last year, according to the company's annual report.
OUE added that "no firm decision has been taken and no definitive agreement has been entered".
The company had $5.5 billion of assets last year, up from $1.8 billion in 2005, according to its annual report. OUE, which gets about 65 per cent of its revenue from hotel operations, is looking for acquisitions to almost double assets to $10 billion in as early as three years, chairman Stephen Riady said last month.
The properties it plans to buy over the next three to five years will help develop a base for property trusts and other investment vehicles, he said.
The company last year bought the Crowne Plaza Singapore, which is connected to Singapore's Changi Airport, and completed the rebuilding of the OUE Bayfront office development facing the downtown Marina Bay. The company also acquired DBS Towers One and Two in the city-state's financial district.
Source: The Straits Times – 20 September 2012
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