OUE Hospitality Trust

OUE Hospitality Trust: DBSV initiates coverage with a BUY recommendation and target price of $0.95. The house notes that OUE HT portfolio comprises two revitalised assets in the heart of Orchard Road worth S$1.76bn – the landmark Mandarin Orchard Singapore with 1,077 rooms, and Mandarin Gallery, which was birthed of a S$200m renovation of the hotel in 2009, and sports 152m of scarce Orchard Road frontage. The Trust offers investors exposure to a diversified hospitality and retail play in Singapore’s most expansive and frequentlyvisited shopping destination. The high fixed income component offers solid downside protection and income resilience. In the Sponsor’s Right of First Refusal (ROFR) is Crowne Plaza Changi Airport, a 320-room transit hotel in Changi Airport. If acquired, it could boost the Trust’s portfolio room count by 30% and give the Trust an opportunity to benefit from the government’s plans to expand Changi Airport and increase passenger traffic.