REUTERS - Shares of Overseas Union Enterprise (OUE) rose to a one-month high after the property company said it will raise about US$480 million (S$614 million) by listing a hospitality real estate investment in Singapore, according to a prospectus for the deal.

OUE shares rose as much as 2.8 per cent to S$2.93 in early trade on Thursday, the highest since June 12.

OUE Hospitality Trust will sell about 682 million units at an offer price of between S$0.88 and S$0.90 a unit to investors.

The company's parent OUE will buy the remaining 626.8 million units, or about half the listed entity.

UOB Kay Hian expects OUE's gearing to improve to 22 per cent after the listing of the hospitality REIT, from 62.1 per cent currently.

"The lower gearing will provide opportunities for OUE to leverage on its balance sheet to pursue development projects across geographies and property segments," the broker said. It maintained a 'buy' rating and S$3.63 target price.