OData or Java Services to be consumed by SAP UI5 application

Before I make any proposal, I am assuming that you understand both oData and REST very well. REST is a well-known and accomplished architecture style whereas oData is a protocol for communication.

OData resides on top of Atompub protocol which in turn is based on REST so overall oData seems to follow REST path only and it is implemented in a similar manner.

The advantage that you get with oData is that it saves a lot of effort and time in handling client side either by writing Javascript code or something else. I agree that the support in JAVA for oData will not be at par with REST but there is sufficient literature for the same which can be of good help.