UOL says retail portfolio still faces headwinds, as hospitality picks up

PROPERTY company UOL Group on Wednesday said headwinds remain, although its retail portfolio's committed occupancy remains stable, with average daily footfall in the third quarter having recovered to 54 per cent of pre-Covid levels.

In the first nine months of 2020, shopper footfall fell 43.1 per cent from the levels in the year before. Committed occupancy at the end of September was 93.5 per cent, from 94.4 per cent at the end of June.

UOL said it continues to offer targeted support for tenants who are still unable to open for business or whose revenues have taken a signficant hit from the fallout of Covid-19.

It did not provide revenue or earnings numbers in its Q3 business update on Wednesday, but offered some operational updates such as "healthy" sales clocked at its residential projects Avenue South Residence and The Tre Ver; these developments have respectively been 53.2 per cent and 98.6 per cent sold.

The committed occupancy in UOL's office portfolio is still "resilient", it said, although new tenant leasing demand is expected to remain soft amid the uncertain economic outlook.

Going into the end of the year, the group is expecting the easing of Covid-19 measures and the upcoming year-end holidays to support the demand for staycations. Most of its Singapore hospitality properties have opened for staycations, with Parkroyal Collection Marina Bay and Pan Pacific Singapore to open for this purpose next.

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There has also been an extension of government quarantine contracts for Pan Pacific Melbourne, Parkroyal Melbourne Airport and Parkroyal Darling Harbour in Australia, as well as for Parkroyal on Kitchener Road in Singapore.

Occupancy for UOL's owned hotels in Singapore and Oceania averaged 68 per cent and 57 per cent for the first nine months of 2020, compared to 84 per cent and 83 per cent respectively a year ago. Revenue per available room remains at less than half the levels of a year ago.

UOL also has some property launches coming up, including Clavon, a condominium near Clementi MRT station targeted to launch next month, a residential project in Canberra Drive to launch in the first half of 2021, and One Bishopsgate Plaza, a mixed-use tower in London projected for completion in the first half of 2021.

As at end-Sept, UOL held S$860 million in cash, and had unutilised credit facilities of S$2.8 billion.

Its shares added S$0.10 or 1.4 per cent to S$7.09.