OUE REIT proposes $500m Crowne Plaza Changi Airport sale

Unitholders may receive $20m in staggered special distributions.

OUE REIT is proposing to divest Crowne Plaza Changi Airport for $500m.

Net cash proceeds from the proposed transaction are expected to be about $498.5m, the trust’s manager, OUE REIT Management Pte. Ltd., said in a bourse filing.

The proceeds may be used for debt repayment, acquisitions, asset enhancement works, unit buybacks, or capital distributions to unitholders.

The manager also plans to distribute $20m of the proceeds to unitholders as special distributions over the first two years after the sale, subject to completion.

The sale price represents a 1.3% premium to the average of two independent valuations.

The sale is expected to result in a net deficit of approximately $15m against book value after accounting for estimated divestment costs of about $4m and the property’s net book value of about $511m as at 31 December 2025.

Assuming the divestment and the termination of the master lease agreement were completed on 1 January 2025, OUE REIT’s distribution per unit would rise by 5.8% on a FY2025 pro forma basis after the special distribution.

If the net cash proceeds are used to repay debt, the REIT’s aggregate leverage would fall to 36.6% from 41.5%.

About 94.3% of its assets under management will remain in Singapore after the divestment. Its office segment will contribute more than 54.3% of total revenue on a pro forma basis.

Crowne Plaza Changi Airport is a 575-room hotel located at 75 Airport Boulevard. It is held under a leasehold estate that commenced on 9 June 2017 and expires on 29 August 2083.

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