OUE Hospitality Trust has agreed to acquire the hotel Crowne Plaza Changi Airport and its adjacent extension for a total of S$495 million (around US $396 million), according to The Business Times. The hotel was acquired from its sponsor OUE Ltd.
According to OUE H-Trust, the hotel offers an annualized yield of 4.5 percent, which will rise to 4.6 percent when the hotel's extension is completed.
The 320-room Crowne Plaza Changi Airport is situated in the vicinity of Changi Airport's passenger terminals and has been in operation since May 2008. Its extension is an adjacent rooms-only extension connected to the hotel by a linkway and is currently under construction. When completed around end-2015, the extension will add 243 hotel rooms to the integrated complex, bringing the total number of rooms to 563.
As The Business Times further reports, OUE agreed to buy the hotel for S$290 million and the extension for S$205 million. The acquisitions will be funded by debt and/or equity and completed in two phases.
"With this acquisition, OUE H-Trust's asset portfolio will increase from S$1.76 billion to approximately S$2.25 billion," said Chong Kee Hiong, CEO of the Reit manager. "The acquisition of CPCA and CPEX will improve OUE H-Trust's portfolio asset diversification as it will have two hotels in two strategic locations and one retail mall. OUE H-Trust's income diversification will also be enhanced. The enlarged portfolio of OUE H-Trust will create a stronger platform for future acquisition growth."