OUE COMMERCIAL REIT (SGX:TS0U)
OUE Commercial REIT - A Mix Bag Of Results
- Renovation works underway to rebrand Mandarin Orchard Singapore.
- Partial divestment of OUE Bayfront property has completed.
- Hotel segment remained under minimum rent.
OUECT's 1Q21 business update
- OUE Commercial REIT (SGX:TS0U) announced its 1Q21 business update. Revenue and NPI decreased by 3.9% and 1.6% y-o-y to S$74.7m and S$61.1m respectively, mainly due to provision of rental rebates of S$2.6m to selected retail tenants. Rental collections for portfolio remain healthy at 94%.
Rental reversions of 0.8-7.2% for Singapore office
- Revenue and NPI of OUE Commercial REIT’s commercial portfolio fell 5.0% and 3.0% y-o-y respectively in 1Q21, mainly on extension of rental rebates to affected tenants. Committed occupancy of commercial portfolio was down 0.8ppt q-o-q to 91.7%.
- Office occupancy in Singapore eased 0.4ppt q-o-q to 93.7% with positive rental reversions of 0.8% to 7.2%. Management expects full year rental reversions to range from flattish to single digit.
- Separately, occupancy in Mandarin Gallery increased 0.5ppt q-o-q to 91.6%. Shopper traffic and sales have rebounded to over 70% of pre-COVID-19 levels. Rental reversions were negative in 1Q21 for Mandarin Gallery and are likely to remain negative for FY21 due to weak business sentiment.
RevPAR fell 57.1%/45.3% y-o-y/ q-o-q to S$52
- OUE Commercial REIT’s hospitality portfolio continued to collect minimum rent of S$16.9m under the master lease arrangements in 1Q21. RevPAR fell 57.1% y-o-y or 45.3% q-o-q to S$52.
- Renovation of Mandarin Orchard Singapore has commenced with one tower being closed for renovation which is expected to reopen in 2022.
- Crowne Plaza Changi Airport reopened in Feb 2021 after temporarily closing in Jan as a precautionary measure to facilitate investigations by the Ministry of Health and continued to serve the aviation sector.
- OUE Commercial REIT completed the partial divestment of OUE Bayfront property with net divestment gain of S$26.3m.
- Factoring in the potential distribution of S$15m of divestment gains and higher risk-free-rate assumption at 1.9%, our fair value estimate for OUE Commercial REIT increases slightly from S$0.40 to S$0.41.
- See
OCBC Research Team
OCBC Investment Research
|
https://www.iocbc.com/
2021-05-07
SGX Stock
Analyst Report
0.41
UP
0.400
