Overseas Union Enterprise Ltd., which is buying California’s tallest building, raised S$600 million ($476 million) in a Singapore initial public offering of its hospitality and retail assets.
OUE Hospitality Trust sold 681.8 million units at 88 Singapore cents, the low end of the range of 88 Singapore cents to 90 Singapore cents at which they were offered, according to a prospectus filed today in the city-state.
OUE follows an IPO of retail assets owned by Singapore Press Holdings Ltd., which raised S$504 million after pricing at the top of the marketed range yesterday. REITs and business trusts were the biggest fundraisers in Singapore’s initial public offering market in the past year, accounting for $4.16 billion of the $6.2 billion of stock priced, according to data compiled by Bloomberg.
At 88 cents, OUE Hospitality Trust is offering a yield of 7.46 percent based on fiscal 2014 projections, according to a prospectus filed in Singapore last week. SPH’s yield is projected at 5.79 percent for 2014, based on the 90 Singapore cents IPO price set on Tuesday.
Shares of OUE fell 1.4 percent at 3:16 p.m. in Singapore trading, the most in two weeks, while Singapore Press’s shares were unchanged. The benchmark Straits Times Index rose 0.3 percent.
A business hotel next to the Singapore airport and two hospitality assets in China, may be offered to OUE Hospitality Trust, according to the IPO prospectus. The properties, which have a total valuation of S$413 million as at Dec. 31, could potentially double the number of hotel rooms owned by the trust, according to the document.
OUE is controlled by Executive Chairman Stephen Riady, a son of Mochtar Riady, who controls Indonesia’s Lippo Group. Lippo’s businesses include real estate, financial services and food across Asia. The company said earlier this year it’s buying the U.S. Bank Tower in Los Angeles, the tallest in the West Coast state, for $367.5 million.
The share sale was managed by Credit Suisse Group AG, Goldman Sachs Group Inc. and Standard Chartered Plc.