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OUE to buy tallest LA building

OUE will acquire the US Bank Tower, which rises to 310m, for $459 million. The building would appeal to a broad base of local and international office tenants operating in California, says OUE's executive chairman.

Dennis Chan

The Straits Times

Publication Date : 12-03-2013

 

Overseas Union Enterprise (OUE) will acquire the iconic United States Bank Tower in Los Angeles for US$367.5 million, it announced yesterday.

The acquisition, through its wholly owned United States subsidiary Beringia Central, will include related properties Maguire Gardens and a carpark facility in downtown LA.

Rising to 310m, with 72 floors of office space and six levels of underground parking, the US Bank Tower has an area of about 1.4 million sq ft. The building - the tallest in LA - was completed in 1989.

It is about 56.3 per cent occupied with a diverse tenant base. The US Bank Tower is a premium office property at the foot of Bunker Hill.

OUE is acquiring the properties from Library Square Associates, a subsidiary of MPG Office Trust, a US real estate investment trust.

OUE executive chairman Stephen Riady said: "After a successful 2012, OUE is seeking new avenues for growth where value can be identified and realised.

"We intend to bring our knowledge and network to bear in pursuing new opportunities to generate value for shareholders."

He noted that the well-known US Bank Tower would appeal to a broad base of both local and international office tenants operating in California.

OUE intends to leverage on its strengths in leasing and asset repositioning to increase occupancy and net operating income yield on the asset.

The acquisition would strengthen its portfolio of commercial properties and enhance shareholder value over the long term, OUE said.

An office will be set up in LA to manage the asset, it added.

The deal is also accretive to its earnings per share.

As an illustration, earnings per share would rise to 10.3 cents from 9.9 cents for the year ended December 31, assuming that the US Bank Tower was acquired at the beginning of last year.

The company's net tangible assets per share, however, would remain unchanged at S$3.44.

The American investment comes less than two months after OUE bowed out from competing for control of Fraser & Neave.

Last month, it reported a full-year profit of S$90.1 million, down 76.2 per cent from the S$378.7 million in 2011.

 

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