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OUE sells US Bank Tower for US$430 million

The Edge Singapore
The Edge Singapore7/17/2020 01:02 AM GMT+08  • 2 min read
OUE sells US Bank Tower for US$430 million
OUE will book a drop in EPS of 35 cents from the sale
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SINGAPORE (July 17): OUE has finally sold its Los Angeles property, the US Bank Tower, a year-and-a-half after putting it up for sale.

OUE bought this property (picture, taken from OUE’s website) back in 2013 for US$367.5million ($459.4 million). It will be selling it to USBT Property Owner LP for US$430 million.

The sale is slated for completion around September and if so, OUE will result in a decreased of 35 cents in earnings per share from the sale for FY2020 ending December 31 2020.

The US Bank Tower, a 72-storey skyscraper completed in 1989, featured in Hollywood productions such as the 1996 sci-fi flick Independence Day.

According to OUE, the sale will enable it to “streamline its asset ownership in a period when the longer-term outlook of the US property market may not be favourable”.

Due to the Covid-19 outbreak, rental income from the US Bank Tower has suffered, as tenants have either reduced their space or close down.

“Unlocking capital from this divestment will enable the company to recycle its capital to more optimally pursue higher growth reinvestment opportunities if and when such opportunities arise,” said OUE.

In a separate announcement, OUE Commercial REIT said it has declined to exercise its right of first refusal offer to buy the US Bank Tower from OUE as the terms would not be accretive to its distribution per unit.

“OUE C-REIT will continue to explore opportunities for the acquisition of yield-accretive assets which are in line with its investment criteria and strategy,” said the REIT.

OUE shares ended July 16 unchanged at $1.22, and down 19.2% year to date.

OUE C-REIT shares ended July 16 down half a cent to 39 cents. It is down 31.6% year to date.

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