http://www.straitstimes.com/Money/St...ry_525032.html

May 11, 2010

OUE to launch first fully furnished flats

Property firm also proposing a stock split to improve the counter's marketability

By Joyce Teo


PROPERTY firm Overseas Union Enterprise (OUE) will soon launch for sale Singapore's first fully furnished apartments.

Executive chairman Stephen Riady told The Straits Times yesterday that the firm is bullish on the local economy and aims to significantly increase its assets portfolio in five years or so.

The firm, which released strong first-quarter results yesterday, also announced that it is proposing a one-into-five stock split to improve the counter's marketability.

This comes after Indonesia's Lippo Group - Mr Riady is its president - recently bought out Malaysian tycoon Ananda Krishnan's interest in OUE.

This move upped its stake in the property firm to 88.52 per cent.

The firm's move into furnished flats caught many eyes yesterday. More than 90 per cent of OUE's assets are in Singapore's prime office, hospitality, retail and residential sectors.

It has just one residential project in its portfolio - the former Grangeford condominium site that it purchased in a collective deal in the boom days of 2007.

The showflat for the high-end project is almost ready and the launch could take place soon. 'It will be fully-furnished as in we'll be providing the dining table, sofa, beds and even the linen and lamps,' said Mr Riady.

The furnishings will be branded and buyers will have a choice of colours.

'For sure in Singapore, nobody has done it...We think there's a big market for this, for people who want the convenience,' he said.

Residents will have access to a concierge service as the condominium is near the group's Meritus Mandarin hotel.

The project will have 462 units, with 268 studios of 550 sq ft to 570 sq ft. There will also be 66 two-bedroom units and 128 three-bedders.

The firm is also likely to launch a smaller project at the former Parisian condominium site at Angullia Park. It is managing the project, after selling the site to China Sonangol Land late last year for $283 million.

Mr Riady said he is bullish on the Singapore market in the short- and long-term: 'Government stimulus programmes all over the world have helped,' he said, adding that Asia is at the centre of the global economic recovery.

He hopes to grow OUE's portfolio of assets to about $9 billion to $10 billion in five years. Its assets were worth $3 billion as of the first quarter.

He said OUE will be an integrated prime property firm with a mainly Singapore focus.

It plans to derive half its income from recurrent streams and the rest from development profits, so it is looking to ramp up its residential business.

'We'll be looking to have a more balanced portfolio,' said Mr Riady.

The plan is to grow its hospitality business via management contracts in countries such as China.

The ambitious plans were unveiled in the wake of a first-quarter net profit of $185 million, up from $12.5 million in the same period a year ago.

Excluding the revaluation gains and write back of impairment loss on its development property, it posted a first-quarter profit before tax of $23.7 million, up from $8.6 million a year ago.

Revenue was $48 million for the three months to March 31, up 45.7 per cent from $32.9 million a year earlier, thanks largely to better performances by the hospitality division and contributions from the Mandarin Gallery.

Earnings per share was at 94 cents, up from six cents a year ago, while net asset value per share reached $11.30, up from $10.37 at the end of last year.

OUE said its proposed stock split will encourage greater participation by smaller investors, make it easier to invest and likely enhance the liquidity of its shares over time.

The firm halted trading yesterday. Its stock previously traded at $17.10.

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