SINGAPORE (Sept 11): OUE Commercial REIT (OUE C-REIT) shocked the market on Tuesday morning by announcing an unabashedly dilutive rights issue, one not seen among the S-REITs since Sabana Shariah Compliant Industrial REIT’s announcement in Dec 2016.

The rights issue comes as part of OUE C-REIT's plans to fund its acquisition of the office portion of OUE Downtown from its sponsor, OUE Limited, for $908 million.

The agreed price works out at $1,713 psf (the property has a remaining land tenure of 48 years), or a hypothetical $2,234 psf if the lease is topped up to 99 years. The price includes income support of $60 million over five years.

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