The weekly round-up is a new column that looks at and summarises interesting Singapore corporate developments and business news over the past week.
Keppel Corporation Limited (SGX: BN4)
Probably the biggest piece of news this week was when Keppel Corporation announced that it was exploring a potential combination with rig-player Sembcorp Marine Ltd (SGX: S51).
You can read more about the details HERE.
United Overseas Bank Ltd (SGX: U11)
One of Singapore’s largest lenders has set its sights high for the coming years.
United Overseas Bank, or UOB, intends to double its wealth management income and increase its assets under management (AUM) by a double-digit compound annual growth rate in five years.
Such a move is in line with increased digital adoption caused by the pandemic.
Jacquelyn Tan, head of Group Personal Financial Services at UOB, announced that the bank will commit more than S$200 million in digital innovation over the next three years.
The bank launched a new wealth management solution called SimpleInvest that allows customers to invest with as low as S$100, allowing many more to practice dollar-cost averaging.
Customers can choose from three actively managed portfolios on UOB’s banking app, UOB Mighty, with a sales charge of just 0.8 per cent.
SimpleInvest will progressively be rolled out to other regions in the next few years.
Investors can expect more such innovations in the pipeline as the lender works to build its omnichannel capabilities to serve its customers better.
Prime US REIT (SGX: OXMU)
Prime US REIT’s portfolio comprises 12 Class A freehold office properties in 11 US cities.
Its portfolio has a carrying value of around US$1.4 billion as of 31 March 2021.
The REIT announced its intention to acquire two properties — Sorrento Towers in California, and One Town Center in Florida, for around US$245.5 million.
Sorrento Towers has a 95.6% occupancy rate with 11 tenants while One Town Center is around 94.7% occupied with 14 tenants.
These acquisitions enhance the quality of Prime US REIT’s portfolio by improving its portfolio weighted average lease expiry (WALE) by net lettable area from 4.3 years to 4.5 years.
The addition of the two properties will also raise distribution per unit (DPU) for FY2020 by 2.4% from US$0.0694 to US$0.0711.
Gearing, however, will jump sharply from 33.8% to over 39%.
The REIT manager launched a private placement of units in Prime US REIT at US$0.81 per unit to partially fund the acquisitions.
The placement received healthy demand and was more than two times subscribed.
A total of 98.766 million new units will be issued from the placement exercise, raising a total of US$80 million.
Cromwell European REIT (SGX: CWBU)
Cromwell European REIT, or CEREIT, invests in a portfolio of properties in Europe that’s used for office, retail and light industrial or logistics purposes.
The REIT owns 108 properties worth around EUR 2.3 billion spread out across countries such as Netherlands, Italy, France, Germany and Poland, to name a few.
During the week, CEREIT announced the divestment of the Parc de Popey assets located in Bar-le-Duc, France.
The property consists of a single warehouse building with office accommodation that was built in 1995.
It is currently occupied by a major postal service and logistics company owned by the French government.
This sale was made at a 53% premium to the REIT’s IPO property purchase price and a 21% premium to its latest valuation, respectively.
This asset will be sold for EUR 5.8 million (around S$9.3 million) and is expected to be completed by the third quarter of 2021.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.