OUE

OUE: Morgan Stanley initiates OW with $3.34 target price. Notes about half of property group's gross asset value derived from Spore office sector, which will benefit from the office space recovery. Cites mgmt actively extracting value by undertaking asset enhancement initiatives for existing properties, while at same time acquiring assets to expand portfolio. Highlights OUE's current asset portfolio of ~$5bn offers various opportunities for enhancement & redevt, which could unlock value & further expand its asset & earnings base. Large balance sheet & relatively low gearing of 39% puts OUE in good position to take on more acqns. OUE has been attracting interest from a few broking houses of late with reports by Cimb (TP: $3.37) & Credit Suisse (TP: $3.61). We wonder if this could be related to a possible placement by major s/holder Lippo, which still holds a 79.4% stake despite placing out pre-split 18m shares at $11.50 ($2.30 equiv) in Jun this year.