Look out for OUE Hospitality Trust's potential deals
Its sponsors recently finished Oakwood Premier OUE Singapore.
RHB Research said OUE Hospitality's (OUEHT) can have potential deals in Singapore and key global gateway cities.
According to a report, its sponsors recently completed Oakwood Premier OUE Singapore (serviced residences) in Singapore, which currently has a 60% occupancy rate.
This "could potentially be an acquisition target by year-end if its performance stabilises," said RHB analyst Vijay Natarajan.
With its 38.8% gearing nearing the maximum allowable limit 45%, the REIT is expected to have future acquisitions made via a combination of equity and debt.
Here's more from RHB Research:
OUEHT announced last December that it has refinanced SGD859m of debts expiring over the next three years.
The average cost of debt post refinancing will be 2.4%, 40 bps lower than its current rate of 2.8%, with 71% of debt at fixed rates.
With no loans expiring until Dec 2020, the early refinancing removes concerns on potential increases in finance costs from an expected rise in interest rates.