Broker Name: CGS International
Date of Report: January 28, 2026
Excerpt from CGS International report.
Report Summary
- OUE REIT’s FY25 distribution per unit outperformed estimates, driven by strong commercial office performance, finance cost savings, and a rebound in hospitality, with a positive outlook for Hilton Orchard.
- The REIT maintains ample debt headroom and is exploring yield-accretive growth opportunities, including a potential stake in Sydney’s Salesforce Tower, ongoing asset enhancements, and further interest cost reductions.
- Aggregate leverage is healthy at 38.5% with further potential for acquisitions before hitting gearing limits, and management aims for continued rental reversions and hospitality growth in FY26-27.
- OUE REIT has refreshed its ESG targets with strong environmental achievements and aims for 90% green financing by FY30, but improvement is still needed in its governance pillar.
- The target price is raised to S\$0.41, with an “Add” rating maintained, supported by a positive rental and hospitality outlook and potential accretive acquisitions.
- Key risks include non-renewal of major leases and higher-than-expected interest costs, but catalysts include value-accretive deals and early lease renewals.
- Financials highlight stable net property income, improving distributable profit, and a rising dividend yield projected to reach 6.69% by FY28.
Above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website : https://www.cgs-cimb.com
