The OUE Hospitality Trust IPO will be offered at a price of S$0.88, raising some S$600 million. Subscriptions for the IPO open today at 1800 and will run till Tuesday 23 July at 1200. Units of OUE Hospitality Trust are expected to commence trading on the SGX on Thursday 25 July at 1400.
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| The OUE Hospitality Trust will have an initial portfolio of 2 properties along Orchard Road, They are namely the Mandarin Gallery and the Mandarin Orchard Singapore. |
The offer price of $0.88 represents the lower end of an indicative price range of between S$0.88 - S$0.90 announced earlier. This comes as a surprise as most investors have predicted that the OUE Hospitality Trust would settle for the upper end given how the SPH REIT has managed to garner overwhelming demand from institutional investors despite pricing its offering at the top mark of S$0.90.
At the offer price of S$0.88, OUE Hospitality Trust is projected to yield of 7.46 percent based on fiscal 2014 projections, according to a preliminary prospectus filed with the Monetary Authority of Singapore last week.
According to data gathered by Bloomberg, REITs and business trusts were the biggest fundraisers in Singapore’s IPO market in the past year, raising some S$5.27 billion in totality. The day before, SPH REIT announced an IPO that would raise some S$504 million for the newspaper publisher.
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