OUE C-Reit H2 DPU down 12.3% to 1.43 Singapore cents

OUE Commercial Real Estate Investment Trust (OUE C-Reit) on Thursday posted a distribution per unit (DPU) of 1.43 Singapore cents for the second half of the fiscal year ended December 2020, down 12.3 per cent from 1.63 Singapore cents in the year-ago period.

As a result, the Reit's FY 2020 DPU came in at 2.43 Singapore cents, some 26.6 per cent lower than 3.31 Singapore cents a year ago.

Distributions for the period under review will be paid out on March 9, after books closure on Feb 5.

Revenue for H2 dipped by a marginal 0.1 per cent to S$150 million from S$150.1 million in the corresponding period last year. Revenue for FY 2020 however rose 13.5 per cent to S$292 million.

Net property income for the period fell 1 per cent year-on-year to S$119.4 million from S$120.6 million.

The Reit said its commercial segment recorded lower revenue and net property income mainly on the back of rental rebates and other relief measures doled out to its retail tenants.

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This was, however, partially offset by the inclusion of income from Mandarin Gallery upon completion of the merger in September 2019.

Income available for distribution for H2 fell 0.8 per cent to S$75.5 million from S$76.1 million last year.

For FY 2020, OUE C-Reit said it had retained some S$11 million worth of capital distribution to "maintain financial flexibility". This included S$6 million worth of capital relating to ongoing working capital requirements for its hospitality segment.

OUE C-Reit also said that it had extended some S$18.3 million worth of rental rebates to support tenants during the Covid-19 pandemic. This amount excludes S$21.9 million of support from the Singapore government in the form of tax rebates and cash grants, added the group.

As at end-December 2020, the valuation of OUE C-Reit's investment properties stood at S$6.52 billion, translating to a net asset value per unit of 59 Singapore cents. The Reit said the y-o-y decline was due primarily to lower valuations for the hotel and retail components of its portfolio.

Its total debt remained stable at S$2.66 billion, while its aggregate leverage increased to 41.2 per cent due to lower portfolio valuations.

Looking ahead, OUE C-Reit said the Mandarin Orchard Singapore will commence the phased asset enhancement works for the rebranding to Hilton Singapore Orchard to enhance the competitive positioning of the property among the upper upscale hotels along Orchard Road.

It added that this move will position the property to capture the recovery in the Singapore hospitality segment when restrictions are eventually relaxed.

"In light of the fluidity in the recovery trajectory, the manager will adapt its strategies according to the business environment and continue its focus on proactive asset management and prudent capital management to maintain financial flexibility, so as to preserve sustainable long-term returns to unitholders," added the Reit.

Units in OUE C-Reit ended Thursday at 38.5 Singapore cents, down 1.3 per cent or 0.5 cent.