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!
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Kyith is the Owner and Sole Writer behind Investment Moats. Readers tune in to Investment Moats to learn and build stronger, firmer wealth foundations, how to have a Passive investment strategy, know more about investing in REITs and the nuts and bolts of Active Investing.
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Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Fee-only Wealth Advisory firm Providend.
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- 98 Years of US Small Cap Value Premium Over S&P 500 - March 28, 2023
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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! ^^