Some might be more interested in OUE Hospitality Trust than SPH Trust because the distribution yield the former has promised is higher at 7.46% compared to the latter’s 5.79%. Although the two are not strictly comparable since they are holding different types of real estate, let us look past that for now and just concentrate on the numbers to see which one is a better deal.

Mandarin Hotel.

OUE Hospitality Trust is being offered at a small discount to NAV while SPH REIT is being offered at a small premium to NAV. Oh, I like a discount!

OUE Hospitality Trust is going to have a gearing level of some 32.8% while SPH REIT’s gearing level is 27.3%. Oh, I like SPH REIT more now because its gearing level is lower.

Leverage, of course, makes it harder to see the underlying yield. If we were to remove leverage and assume …