OUE Hospitality Trust IPO

Didn’t notice but apparently OUE is spinning off their 2 Orchard Hotel as a REIT.

You can read the prospectus here.

Like most hospitality REIT, it ends up as a stapled security. But you will notice the attractiveness.

  • Its got 2 Mandarin Hotel which are reasonably well branded hotels
  • Its got a greater than 7% dividend yield

Hospitality REITs work a bit differently from most REITs in that a sizable part of their income depends on revenue earned from the business and as such they are a proxy to the domestic tourism economy.

Even then, they look attractive versus Far East and CDL Hospitality REIT, 2 Hotel REITs listed in Singapore. Those 2 REIT will likely offer only 6% yield at current market price.

It is strange how come SPH, Mapletree this year decide to  list this properties as a REIT with so little assets. All three will list with …