OUE (LJ3.SG) is flat at $2.86 after wavering between positive and negative after news the developer will be entering the US market by purchasing the US Bank Tower and some related properties in Los Angeles for US$367.5 million ($458 million). There are some concerns about the developer’s first foray into a distant market, says Bryan Go, an analyst at Phillip Securities.

But he adds, “They are currently predominantly in commercial in Singapore, so they have the experience.”

He expects OUE to try to replay its turnaround of the DBS Tower with the distressed US asset, with some asset enhancement and moves to optimise the occupancy rate. He doesn’t expect deal funding to be a problem.

“They had funding previously for the F&N deal, so I think they still have the cash on hand.”

OUE is also planning to launch an IPO for a hospitality REIT in about six months with at least two of its Singapore assets, in a move that could raise up to $1 billion.