Broker Name: CGS International
Date of Report: October 27, 2025
Excerpt from CGS International report.
- OUE REIT’s 3Q25 results were stable, meeting expectations, with revenue and net property income largely in line due to strong commercial rents but offset by lower hotel contributions.
- Finance costs fell significantly (down 19.7% year-on-year), aided by a lower interest rate environment and successful refinancing, supporting upgrades to dividend forecasts and a maintained positive outlook with a target price of S\$0.38.
Report Summary
- OUE REIT’s financial performance remained resilient; commercial assets showed stable occupancy and positive rental reversions, while hotel segment outlook improved on expected recovery in hospitality demand.
- Interest expense savings from early refinancing and falling rates are likely to continue, supporting higher distributable income and forecasted dividend per unit (DPU) growth in FY25-27.
- Aggregate leverage remains manageable at 40.9%; further debt refinancing in FY26 could reduce interest costs further.
- ESG progress noted, with strong environmental scores and high proportion of green-certified assets and leases, but governance scores remain an area for improvement.
- Analysts maintain an Add rating, highlighting a projected FY26 DPU yield of 6.4% and a 10.1% upside to the target price, while flagging travel demand risks and office leasing momentum as potential challenges.
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.cgsi.com.sg
