OUE Reit is selling the Crowne Plaza Changi Airport hotel for S$500 million to a joint venture between OUE Limited and Tokyo Century Corporation, the company announced today in Singapore [1, 2, 3, 4]. The sale price represents a 1.3% premium to the average of two independent valuations of the property [1, 2, 3, 4].
The hotel, located at Terminal 3 of Changi Airport, has 575 rooms and is operated by InterContinental Hotels Group under a master lease and management agreement that runs until 2028 [1, 3, 4]. Net cash proceeds from the sale are expected to total about S$498.5 million [2, 3, 4].
OUE Reit plans to distribute S$20 million of the net proceeds to unitholders as special distributions, evenly over the first two years following the completion of the sale [1, 2, 3, 4]. The company expects, on a pro forma basis for fiscal year 2025, a 5.8% increase in distribution per unit and a distribution yield of 6.6%, assuming the sale had completed at the beginning of 2025 [2, 3, 4]. If the proceeds are fully used to repay debt, OUE Reit's aggregate leverage would fall from 41.5% to 36.6% on a pro forma basis [2, 3, 4].
Following the divestment, the REIT's portfolio will remain focused on Singapore assets, which will account for roughly 94.3% of total assets under management [2, 3, 4]. The portfolio will be anchored by the office segment, contributing over 54.3% of total revenue based on pro forma figures [2, 3, 4].
OUE Limited holds a 51% stake in the acquiring joint venture, with Tokyo Century holding the balance [3, 4]. This transaction builds on the partnership formed by the two companies in May 2025 when they broke ground on Hotel Indigo Changi Airport at Terminal 2, their inaugural project together [1, 2, 3].
Han Khim Siew, CEO of OUE Reit manager, said, "This is an opportune time to crystallise the value of Crowne Plaza Changi Airport. It allows us to avoid substantial capital expenditure and income risks arising from operational downtime and transition uncertainty associated with potential asset repositioning works" [2].
The sale is subject to approval by OUE Reit unitholders at an extraordinary general meeting scheduled for the third quarter of 2026 and also requires consent from Changi Airport Group [1, 3, 4]. Completion is expected in the fourth quarter of 2026 [1, 3, 4].
