Time to check into OUE Hospitality Trust

SINGAPORE (Sept 22): CIMB is maintaining its “add” rating on OUE Hospitality Trust (OUE HT), with a new target price of 75 cents.

OUE HT is poised to post the strongest DPU growth among its peers projecting a 9.8% year-on-year growth in net property income, and is CIMB’s preferred pick in the hospitality sub-sector.

In a Wednesday sector note, lead analyst Yeo Zhi Bin expects quarterly distribution per unit (DPU) to improve sequentially. The increase will be driven by contributions from the extension of Crowne Plaza Changi Airport, the refurbishment of 250 rooms in Mandarin Hotel Orchard, as well as openings of Michael Kors (MK) and Victoria’s Secret (VS) in Mandarin Gallery in 2H16.

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