Broker: Maybank Research Pte Ltd
Date of Report: July 23, 2026
Excerpt from Maybank Research Pte Ltd report.
Report Summary
Stock Focus: OUE REIT (OUEREIT SP)
Action: BUY
Target Price: SGD 0.45 (upside of +29% from current price SGD 0.37)
Key Highlights and Actionable Insights:
- Results in line, strong DPU growth: 1H26 DPU rose 28.6% YoY, driven by stable commercial income, strong hospitality performance, and 16.6% reduction in finance costs.
- Hospitality outperformance: RevPAR increased 10.7% YoY to SGD 258, with robust occupancy and healthy forward bookings. The hospitality segment saw double-digit YoY growth in revenue and NPI.
- Balance sheet remains healthy: Gearing stable at 41.5%, with cost of debt declining to 3.6%. Planned divestment of Crowne Plaza Changi Airport should reduce pro-forma leverage to ~36.6%, increasing acquisition headroom.
- Growth and recycling strategy: OUE REIT is exploring divestment of its 67.95% stake in One Raffles Place. Income loss from asset sales is expected to be partially replaced by further stake acquisitions in Salesforce Tower. Successful asset sales near book value would demonstrate management’s ability to monetize assets and may help narrow the REIT’s P/NAV discount.
- ESG progress: Over 95% of the portfolio is green certified, and nearly 70% of its debt is sustainable financing. OUE REIT aims for further ESG improvements, including board diversity and setting net-zero targets.
- Valuation: OUE REIT trades at a significant discount to book value (P/NAV 0.68x) and offers a forward DPU yield of ~6.2-6.6% with a DPU CAGR forecast of 3% over FY24-27E.
Implications for Investors:
- Maintain BUY with an unchanged target price of SGD 0.45. OUE REIT remains attractive given its yield, asset recycling, and growth strategies, as well as potential upside from narrowing its discount to NAV.
Above is an excerpt from a report by Maybank Research Pte Ltd. Clients of Maybank Research Pte Ltd can access the full research report from the broker’s website.
