Starting OUE REIT at “buy” with a 33-cent target price, 27% above its last close price of 26 cents, Chew and Liu say the NAV discount is “not warranted”. “Around 92% of the portfolio is in Singapore with resilient occupancy rates and rental growth.”
PhillipCapital has initiated coverage on OUE (SGX:LJ3
) REIT, calling it a “50% discounted investment-grade REIT” with upside potential from asset enhancements.
In a June 24 note, research head Paul Chew and analyst Liu Miaomiao note that OUE REIT has “the largest discount” to net asset value (NAV) among S-REITs rated “investment grade”, at 0.43x P/NAV. OUE REIT also boasts an “attractive” yield of 7.8%, they add.
