Business Times 

Business Times

Real Estate

SINGAPORE: A joint venture by Lippo Group and Usaha Tegas Sdn is seeking a S$600 million (RM1.38 billion) loan to pay for a 55 per cent stake it bought in Overseas Union Enterprise Ltd. a banker involved in the deal said.
The joint venture. which had its name changed to OUE Realty Pte from Lippo Property Investment Pte. is 60 per cent owned by Indonesia's Lippo Group. the banker said.
Lippo owns Indonesia's biggest publicly traded real-estate company PT Lippo Karawaci. while Usaha Tegas owns Malaysia's largest mobile-phone company Maxis Communications Bhd.
Raiffeisen Zentralbank Oesterreich AG was hired as the arranger and is marketing the loan to other banks. offering them an all-in pricing. which include interests and fees. of 0.11 percentage point for the one-year portion and 0.12 percentage point for the two-year portion. the banker said.
Lippo and Usaha are buying property company Overseas Union to benefit from a rally in the region's real-estate markets. led by Hong Kong and Singapore.
According to Chicago- based real-estate broker Jones Lang LaSalle Inc. office rents in the first three months of 2006 rose 44.3 per cent from a year ago for the same period in Hong Kong.
Office rents in Singapore grew 35.6 per cent in the first quarter of 2006 from a year ago for the same period. Singapore's second-largest bank United Overseas Bank Ltd sold the 55 per cent stake in Overseas Union for S$989.9 million (RM2.27 billion).
OUE Realty is making a mandatory cash offer for the rest of the shares it doesn't own in Overseas Union at S$10.20 each. Lippo's adviser for the purchase BNP Paribas Peregrine (Singapore) Ltd said in a statement on May 27.
The purchaser "intends to use OUE as a platform to develop its interests in the property and hotel sectors in Singapore. and to further expand its interests in these sectors in Asia. including in countries such as Hong Kong and China." BNP Paribas said in a statement. - Bloomberg