OUE spending $450m to refurbish 3 properties
It also says asset enhancement is possible for its prime OUB Centre
Overseas Union Enterprise (OUE) could spend as much as $450 million to do up three of its properties - Meritus Mandarin hotel, office building Overseas Union House, and the adjacent Change Alley Aerial Plaza - chief executive David Lee told BT yesterday, as the property group unveiled new looks for all three developments.
OUE, which is now controlled by Indonesia’s Lippo group and Malaysian tycoon Ananda Krishnan, also said that asset enhancement was possible for its prime OUB Centre at Raffles Place as it could benefit from an increased plot ratio.
At the Meritus Mandarin hotel’s Mandarin Gallery, OUE will spend between $100 million and $200 million to revamp the shopping area into a premier luxury retail mall with an estimated 250,000 sq ft of retail space, up from just 75,000 sq ft at present.
Completion is scheduled for mid-2010, after which rents will be increased, said Dr Lee. Average rental now stands at $9.45 per sq ft per month, with the gallery consistently commanding occupancy rates of over 95 per cent.
Once it is all done up, the gallery will showcase fine luxury global designer labels and will be a unique ‘one-stop’ shopping and dining experience, OUE said.
Elsewhere, Overseas Union House (OUH) will be pulled down, and in its place an 18-story Grade A office tower will emerge, said Dr Lee. Together with a complete refurbishment of Change Alley Aerial Plaza next door, an estimated net lettable area of 400,000 sq ft will be available, he said. The whole project is expected to cost about $250 million.
The target for completion is late 2009. The property, said OUE, will command strong rentals because of tight supply in the office sector until 2010, when the Marina Bay Financial Centre is due to be completed.
The upcoming development in the heart of the central business district has the potential to get even bigger. OUE is one of eight bidders for the Collyer Quay government land site, for which tender results are due before the year’s end.
Both OUH and Change Alley Aerial Plaza will be integrated with Collyer Quay if OUE’s bid is successful, the company said.
Dr Lee said that OUE has not yet decided how it will fund the refurbishment works. OUE’s third quarter results show that as at Sept 30, it had $106.2 million in cash and some $497.9 million of available-for-sale financial assets.
Earlier this month, OUE said it had completed selling its entire stake in United Overseas Bank (UOB) for $376.9 million.
The company’s shares are currently suspended from trading as the free float is less than 10 per cent.
Source : Business Times - 16 Nov 2006
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