Road ahead for OUE Hospitality Trust turns challenging

SINGAPORE (Nov 1): RHB is downgrading its view on OUE Hospitality Trust (OUE HT) from “buy” to “neutral”, while lowering its target price to 70 cents from 75 cents previously to reflect distribution per unit (DPU) dilution arising from its 1-for-3 rights issue in April and acquisition of Crowne Plaza Changi Airport (CPEX) in August.

(See also: OUE Hospitality Trust’s 3Q DPS falls 28.5% to 1.23 cents on lower retail revenue)

In a Tuesday report, analyst Vijay Natarajan foresees the trust’s hotel revenue per available room (RevPAR) being negatively impacted by weakening corporate demand amid competitive pressures, which stem from incoming hotel supply.

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