OUE C-Reit posts 12% increase in Q4 DPU, NPI soars post-merger

Singapore

OUE Commercial Real Estate Investment Trust (C-Reit) posted a 12 per cent year-on-year rise in distribution per unit (DPU) to 0.84 Singapore cent for the fourth quarter ended Dec 31, 2019.

Revenue surged over 80 per cent to S$86.79 million, while net property income jumped nearly 93 per cent to S$70.58 million on the back of a full quarter's contribution of the merger with OUE Hospitality Trust as well as contribution from OUE Downtown Office, which was acquired on Nov 1, 2018.

Amount available for distribution more than doubled from S$21.5 million to S$46.63 million owing to higher net property income and the drawdown of income support at OUE Downtown Office. This was partially offset by higher interest expense as a result of higher borrowings.

As OUE C-Reit has a semi-annual distribution policy, the total DPU to be paid out for the period Sept 4, 2019, to Dec 31, 2019, is 1.1 cents, which will be paid on March 6.

Revenue for the full year was about 46 per cent higher year-on-year at S$257.33 million, while net property income was up about 48 per cent to S$204.95 million and income available for distribution was around 75 per cent higher at S$124.71 million. For the full year, DPU worked out to 3.31 cents, down 4.9 per cent.

Tan Shu Lin, chief executive of the Reit's manager, said: "While the pace of growth of Singapore CBD Grade A office rents has moderated, the manager expects continued positive operational performance for OUE C-Reit's Singapore office portfolio as expiring rents in 2020 are below current market rents, having been committed at a time when rents were lower."

Ms Tan also highlighted that its Crowne Plaza Changi Airport hotel surpassed its minimum rent based on its full year performance.

She added: "Further, the hospitality segment, which is expected to experience a gradual recovery on continued investments in tourism against the backdrop of a benign supply outlook, will also see a boost from the resumption of biennial MICE events this year."

As at Dec 31, the value of OUE C-Reit's investment properties was S$6.77 billion, up from S$4.49 billion a year ago owing to the merger.

OUE C-Reit's aggregate leverage as at end-December 2019 was 40.3 per cent, while the weighted average cost of debt stood at 3.4 per cent per year and the average term of debt was 2.2 years.

Units in OUE C-Reit closed unchanged at 53.5 Singapore cents on Thursday.