In this episode, we sat down with Han Khim Siew, CEO of OUE REIT, to explore the dynamic world of real estate investment and management. Celebrating its 10th anniversary, OUE REIT has grown into one of Singapore’s most significant diversified real estate investment trusts, managing a diverse portfolio of upscale hotels and commercial office spaces.
Han shares his insights on several key topics, including the bifurcation in the office market and how prime, green-rated buildings are thriving due to their appeal to the younger workforce. We also discuss the impact of COVID-19 on work patterns, the resilience of the hospitality sector, and the importance of maintaining high-quality office environments in prime locations.
Additionally, Han explains OUE REIT’s commitment to sustainability and ESG initiatives, which are crucial for attracting multinational tenants and securing favourable financing. We also delve into OUE REIT’s future expansion plans in key gateway cities like Tokyo, Sydney, Melbourne, and Hong Kong.
Key Pointers:
- 00:00 Introduction and Portfolio Overview
- Han Khim Siew introduces himself and OUE REIT
- Discusses the portfolio composition and diversification
- Emphasizes the focus on Singapore properties
- 02:31 Office Space Strategy
- Talks about the bifurcation in office space demand
- Highlights the importance of prime locations and green-rated buildings
- Explains the impact of work-from-home trends
- 06:00 Tenant Dynamics and Market Trends
- Discusses tenant preferences and the importance of CBD locations
- Explains the challenges of right-sizing office spaces
- Mentions the stability of co-working spaces
- 10:00 Impact of Tech Tenants
- Shares insights on the tech tenant composition in their portfolio
- Discusses the changes in tech space demand
- Highlights the benefits of a diversified tenant base
- 16:00 Future Outlook and ESG Commitments
- Talks about the future of office rents and lease expiries
- Emphasizes the importance of ESG commitments
- Explains the benefits of green financing and sustainability-linked loans
- 24:48 Importance of ESG and Green Ratings
- ESG targets linked to credit ratings
- Green-rated buildings in prime locations
- Impact on borrowing costs and dividends
- 27:02 Shanghai Asset and Market Conditions
- Prime location of Shanghai asset
- Over-supply issues in Shanghai
- Long-term belief in asset’s value
- 31:04 Acquisition Strategy and Market Focus
- Focus on key gateway cities
- Interest in Tokyo, Sydney, Melbourne, Hong Kong
- Avoiding further investments in China due to over-supply
- 33:00 Shift to Hospitality Sector
- Increasing revenue from hospitality
- Benefits of dynamic pricing in hotels
- Experience managing large hotels
- 39:02 Operational Improvements and Branding
- Asset enhancement initiatives
- Rebranding to Hilton Singapore Orchard
- Targeting corporate travelers and increasing room rates
- 51:20 Hotel demand and room mix
- Strong demand for certain room categories
- Consultants and air crew as key guests
- Focus on cities with both tourists and business travelers
- 52:57 Sustainable dividend yield
- Reducing seasonality in hotel bookings
- Creating stable revenue streams
- Example of Hilton Singapore’s success
- 54:02 Concerts and events impact
- Significant bookings during major events
- Taylor Swift’s concert as a notable example
- Similar impact to F1 events
- 56:00 Financing strategy
- Avoiding equity fundraisers due to dilution
- Maintaining borrowing ratio below 40%
- Recycling assets to acquire better-performing ones
- 57:55 Future growth plans
- Positive rental reversion in office spaces
- Growth in hotel and retail revenue
- Exploring opportunities in major cities like Sydney and Tokyo
Curious to learn more? Tune in to this episode and discover the strategies that make OUE REIT a leader in real estate investment.
Kenny Loh is a Wealth Advisory Director and REITs Specialist of Singapore’s top Independent Financial Advisor. He helps clients construct diversified portfolios consisting of different asset classes from REITs, Equities, Bonds, ETFs, Unit Trusts, Private Equity, Alternative Investments, Digital Assets and Fixed Maturity Funds to achieve an optimal risk-adjusted return. Kenny is also a CERTIFIED FINANCIAL PLANNER, SGX Academy REIT Trainer, Certified IBF Trainer of Associate REIT Investment Advisor (ARIA) and also an invited speaker of REITs Symposium and Invest Fair. You can join my Telegram channel #REITirement – SREIT Singapore REIT Market Update and Retirement-related news. https://t.me/REITirement
