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.
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