Wolf Money(OUE REIT)cash management

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(Image credit: OUE REIT)


The below article is for educational purpose only. Kindly refrain from taking any action. It shouldn’t constitute as an investment advice. Please read the disclaimer.

LWF has taken a position in OUE REIT. The recent divestment activity saw interest in the stock. I am taking a position for cash management purposes. The REIT has announced the divestment of the Crowne Plaza Hotel at Changi Airport to an interested party of OUE JV for $500m subject to approval by REIT holders in the upcoming EGM. There is also news about OUE REIT and UOB looking to sell One Raffles Place for $2.4b. If OUE REIT is able to get an offer close to the asking price. Based on my calculations, the REIT owns 67.95% of One Raffles, which comes out to around $1.63b for their shares. If they can sell it at asking, subtract the loan of $254m. Net proceeds of $1.376b from the sale is close to 25c per OUE REIT shares. Again hypothetically, using the asking price of $2.4b, the profit from the sale will be around 5.7c improvement to the NAV which stands at 56c now. Share is trading at 35% discount to book value. I am rating their chance of selling One Raffles to be fairly good as this building is located in the most prime location in CBD. It also bears the trophy address of 1 Raffles Place. Trophy asset with the kind of address is not always ready available in the market. Gearing will improve significantly to below 25% if the deal goes through. The current yield of the REIT is close to 6.2%. The position is situational. More details at the end of month update. God Bless. 🙏

*There is a lot of guesstimation on my part. No deal is done without the signing of the actual deal. Kindly do your own dyodd.

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All investments is highly speculative in nature and involves substantial risk of loss. We encourage our reader to invest very carefully. We also encourage reader to get personal advice from your professional investment advisor and to make independent investigations before acting on information that we publish. Much of our information is derived directly from information published by companies or submitted to governmental agencies on which we believe are reliable but are without our independent verification. Therefore, we cannot assure you that the information is accurate or complete. We do not in any way whatsoever warrant or guarantee the success of any action you take in reliance on our statements. All information provided are for education only. Buyer beware,do you own due diligence.

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