CLSA says the recent proposed merger between OUE Commercial REIT and OUE Hospitality Trust “underscores the need for S-REITs [Singapore real estate investment trusts] to drive scale in order to compete with regional peers. At the same time, it highlights that some of the smaller illiquid S-REITs are undervalued and may be targets of future mergers”. Among the REITs that could merge are ART/AHT, Frasers Commercial Trust/Frasers Centrepoint Trust, the smaller industrial REITs and the smaller Chinese retail REITs such as Sasseur REIT and BHG Retail REIT.
SINGAPORE (Apr 29): Now that the shareholders have approved CapitaLand’s proposed merger with Ascendas-Singbridge, attention may turn to synergies and overlaps in the two companies. In particular, ASB’s hospitality arm, Ascendas Hospitality Trust (AHT), is likely to come under the microscope. The clear overlap in the merged company is ASB’s hospitality business and CapitaLand’s lodging business under The Ascott Ltd and Ascott Residence Trust (ART).
The two REITs are not exactly similar. AHT owns 14 hotels valued at $1.8 billion, while ART owns 73 properties valued at $5.3 billion as at Dec 31, of which five are hotels and the rest are serviced residences. Three hotels are in New York, one in Hamburg and one near Sydney Airport.
