OUEHT to ride on recovery of hospitality sector next year

Mandarin Orchard's focus on higher-end market is an advantage.

OUE Hospitality Trust (OUEHT) is well-positioned for the expected turnaround in Singapore hospitality next year, analysts from OCBC Investment Research said.

Lead analyst Deborah Ong said despite the soft corporate demand as a risk, the trust's Mandarin Orchard's relatively large focus on the higher-end leisure market is an advantage.

Additionally, Crowne Plaza Changi Airport (CPCA) should stand to benefit from the opening of Terminal 4 and limbing passenger movements at the airport.

"Changi Group reported that passenger movements were up +7.7% YoY in Jun, and +5.7% YoY for the Jan-Jun period. Remember that CPCA currently contributes only minimum rent as it continues to stabilize, which leaves much more room for upside than downside going forward," Ong explained.

Meanwhile, the trust's Mandarin Gallery is seen to ride on the recovery of luxury spending.

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