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OUE Hospitality Trust IPO

Didn’t notice but apparently OUE is spinning off their 2 Orchard Hotel as a REIT.

You can read the prospectus here.

Like most hospitality REIT, it ends up as a stapled security. But you will notice the attractiveness.

  • Its got 2 Mandarin Hotel which are reasonably well branded hotels
  • Its got a greater than 7% dividend yield

Hospitality REITs work a bit differently from most REITs in that a sizable part of their income depends on revenue earned from the business and as such they are a proxy to the domestic tourism economy.

Even then, they look attractive versus Far East and CDL Hospitality REIT, 2 Hotel REITs listed in Singapore. Those 2 REIT will likely offer only 6% yield at current market price.

It is strange how come SPH, Mapletree this year decide to  list this properties as a REIT with so little assets. All three will list with only 2 assets.

I did not managed to look past all but there could be an explanation for the higher yield.

Both Mandarin hotels are leasehold and they run till 2057.

That is 44 years of land lease only.

Its basically like an industrial REIT with a fluctuating income and at a lower yield.

Whether to go for this IPO or not depends on the receptiveness of the investment public to this kind of segment. It used  to be very popular but given the recent drawdown its hard to say.

Long Term wise This doesn’t appeal as a long term hold. Would rather go for Aims Amp here!

To get started with dividend investing, start by bookmarking my Dividend Stock Tracker which shows the prevailing yields of blue chip dividend stocks, utilities, REITs updated nightly.

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klein

Thursday 18th of July 2013

hi for ipos how can i know where the hardcopy will be distributed

Kyith

Saturday 20th of July 2013

it should be distributed in may banks or banks of the underwriters

victor

Thursday 18th of July 2013

Hi Kyith

I ask amtek, because it pay good div, but will the div be sustainable, I do not know, thus i ask your opinion. It is the business the same as venture? I have venture for many year,

Kyith

Saturday 20th of July 2013

hi victor, i will keep watch this company, unless i do extensive research their business looks very diversified. perhaps you can google and go deep into each segments and read up more on its competitors

victor

Wednesday 17th of July 2013

Hi, What do you think of Amtek? I would appreciate your opinion. Thanks.

Kyith

Thursday 18th of July 2013

hi victor, didnt look at that much. i heard it pays good dividends, but its engineering is diversified that it doesnt grip me. perhaps you can interest me why you are interested in it?

Wee

Friday 12th of July 2013

I thinking whether to buy this reit.

A K

Wednesday 10th of July 2013

My vote goes to AIMS AMP Capital Industrial REIT too! ;)

Dividend Warrior

Wednesday 10th of July 2013

Me too! ^^

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