Summary

• S$0.80/share offer price
• 866 million shares to be created
• • 433 million: OUE
  • 225 million: cornerstone investors - Wealthy Foundation Holdings, Mr Gordon Tang, Mdm Chen Huaidan, Mr Yang Dehe and RHB Asset Management Sdn Bhd
  • 151.75 million: institutions
  • 56.25 million: retail investors

• 6.8% 2014 yield forecast, 6.89% 2015 yield forecast (after income support)
• 23.3% discount to NAV of $1.043/share
• 41.2% gearing ratio
• Ba1 (Moody's) rating
• Prospectus on MAS website click here

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Commentary

• Operating cashflow (based on FY2012) can provide up to ~6.5% yield without income support. For the first two years, if income support kicks in, payout will still be < 100% of cashflow. Else, expect OUE C-REIT to be paying out of their own pocket until rental yields improve
• Average P/B value of direct competitors (CapitaCommercial Trust, Frasers Commercial Trust, Keppel REIT, Suntec REIT) is 0.84 based on 14 Jan 2014 ...