OUE Reit plans to sell the Crowne Plaza Changi Airport hotel to a joint venture between OUE Limited and Tokyo Century for S$500 million, a 1.3% premium over independent valuations. The seller is OUE Hospitality Sub-Trust, a wholly owned subsidiary of OUE Reit. Net cash proceeds from the sale are expected to reach about S$498.5 million [1, 2, 3, 4].
The hotel, operated by IHG Hotels & Resorts, has 575 rooms and is located at Terminal 3 of Changi Airport [1]. OUE Limited acts as the sponsor and controlling unitholder of OUE Reit and will hold a 51% stake in the joint venture. Tokyo Century will hold the remaining 49% [3, 4].
OUE Reit intends to distribute S$20 million in net cash proceeds as special dividends to unitholders evenly over two years after completion of the sale [1, 5, 2, 3, 4]. The sale will reduce OUE Reit's aggregate leverage from 41.5% to 36.6%, assuming the net proceeds are used to repay debt [5, 2, 3, 4].
The hotel's master lease and management agreements expire in 2028 [1, 3, 4]. OUE Reit plans to seek unitholder approval for the transaction at an extraordinary general meeting in Q3 2026, with completion expected in Q4 2026 [1, 3, 4].
Assuming the divestment had occurred on January 1, 2025, OUE Reit's distribution per unit would have increased by 5.8% on a pro forma basis for FY2025, with distribution yield reaching 6.6% [2, 3, 4]. Post-sale, OUE Reit's portfolio remains primarily Singapore-centric, with about 94.3% of assets in Singapore and the office segment contributing over 54.3% of revenue on a pro forma basis [2, 3, 4].
"This is an opportune time to crystallise the value of Crowne Plaza Changi Airport," said Han Khim Siew, CEO of OUE Reit Manager. "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 reflects confidence in Singapore's tourism, aviation, and Changi Airport development, including the Terminal 5 expansion [1]. It is the second collaboration between OUE Limited and Tokyo Century following their May 2025 joint venture to develop Hotel Indigo Changi Airport at Terminal 2, expected to open in 2028 [1, 2].
OUE Reit's stock price closed at S$0.36 on June 25, 2026, up 1.4% amid the announcement. The stock currently trades at about a 40% discount to net asset value [1, 5].
