OUE Hospitality Trust DPU Fall for 4Q2015

OUE Hospitality Trust Logo

OUE Hospitality Trust announces its results for 4Q2015 on 25th January 2016. DPU fell 4.5% to 1.70 cents as compared to 1.78 cents in 4Q2014. Distribution income was $8 million lower than 4Q2014 due to lower contribution from Mandarin Orchard Singapore and Mandarin Gallery.

Overview

OUE Hospitality Trust focuses on Hospitality and Retail sector. Its hotel properties consists of Mandarin Orchard Singapore and Crown Plaza Changi Airport. Its retail properties consists of Mandarin Gallery.

Results

OUE Hospitality Trust 4Q2015 Results

From the above figures, we can see that gross revenue is $2.6 million higher than 4Q2014. Hospitality segment posted higher revenue which offset the lower revenue from the retail segment.

Hospitality

The master lease income contribution from Crown Plaza Changi Airport added $4.0 million of hospitality revenueMaster lease income from Mandarin Orchard Singapore was $1.1 million lower than 4Q2014 mainly as a result of lower room sales and lower Gross Operating Profit (“GOP”).

Retail

Retail revenue was $0.3 million lower than 4Q2014 mainly due to lower occupancy and fit-out periods for tenants arising from lease renewals.

Debt Maturity Profile

OUE Hospitality Trust has a high gearing ratio of 42.0%. The average cost of debt is 2.7%.

OUE Hospitality Trust 4Q2015 Debt

Weighted Average Lease Expiry

The weighted average lease expiry by gross rent is 4.5 years. The weighted average lease expiry by Net Lettable Area (“NLA”) is 3 years. From the statistics below, we can see that majority of the leases are expiring between the current period 2016 to 2018.

OUE Hospitality Trust 4Q2015 WALE

Trust Structure

OUE Hospitality Trust Structure

Things to Note

Discount to Net Asset Value (NAV)

OUE Hospitality Trust is currently trading at S$0.77 (As at 31st December 2015) 14% discount to NAV of S$0.90.

Major Biennial Events

Singapore will again host major biennial events such as The Singapore Airshow and Food & Hotel Asia in the first half of the year. It will also be the first year that the country will host the World Rugby Sevens Series in April 2016. These events are expected to increase hospitality demand.

New Leases for Retail

Two international brands Michael Kors and Victoria’s Secret have signed a seven years and ten years lease with Mandarin Gallery respectively.

SMRT Non Fare Business Saved The Day

SMRT Logo

SMRT announces its 3Q FY2016 results on 25th January 2015. Similar to 2QFY2016, operating expenses increased 2.4% to $303.0 million due to higher repairs and maintenance costs, staff costs, depreciation, and other operating expenses.

SMRT Results 3QFY2016

Fare Business

The group’s rail operations (Train and LRT) posted a combined loss of $1.1 million in YTD FY2016 as the increase in operating expenses outpaced revenue growth.

Bus operations posted an operating profit of $3.4 million in 3Q FY2016 on the back of higher revenue, training grants, reliability incentives and lower diesel costs, partially offset by higher staff costs, depreciation, and repairs and maintenance expenses.

Non-Fare Business

Taxi operating profit increased to $4.8 million and Rental operating profit increased to S$21.8 million.

This was due mainly to:

  • Higher taxi rental contribution and more early retirement of taxis in 3Q FY2015.
  • Higher rental revenue contribution from train stations and bus interchanges.

Things to Note

Rail Financing Framework

No news since the last mention which causes the surge in share price (SMRT Shares Surges on Hopes of Rail System Reform).

Bus Services License Expiry

SMRT is in discussion with the authorities on the contract terms for the remaining bus services beyond the license expiry in August 2016.

 

Frasers Commercial Trust DPU Rises for Q1FY16

Frasers Commercial Trust Logo

Frasers Commercial Trust announces it results for first quarter 2016 on 20th January 2016. A higher Distribution Per Unit (DPU) of 2.51 cents was announced which is 2% increase as compared to 2.46 cents in Q1FY15. The results are attributed to higher contribution from Alexandra Technopark and first full quarter contribution from 357 Collins Street but was offset by weaker Australia dollar and lower occupancy in Central Park.

1 October 2015 to 31 December 2015 (“1Q2016”) vs 1 October 2014 to 31 December 2014 (“1Q2015”)

1Q2016
(S$’000)
1Q2015
(S$ ‘000)
YoY(%)
Gross Revenue 39,623 35,459 12.0
Net Property Income 29,378 25,444 15.0
Distributable Amount 19,702 16,712 18.0
Distribution Per Unit (“DPU”) (cents) 2.51 2.46 2.0
Annualised DPU (cents) 9.96 9.76 2.0

Portfolio

Frasers Commercial Trust portfolio consists of six properties. Singapore properties in terms of value makes up 62% and Australia properties make up the remaining 38%.

Singapore

  • 55 Market Street
  • China Square Central
  • Alexandra Technopark

Australia

  • 357 Collins Street
  • Caroline Chisholm Centre
  • Central Park

Debt Maturity Profile

There is no refinancing required until FY17. Frasers Commercial Trust has hedged 81% of gross borrowings on fixed rate. Gearing ratio is healthy at 36.2%.

Weighted Average Lease Expiry

Frasers Commercial Trust has a healthy average occupancy rate of 92.9% and healthy WALE of 3.3 years.

Proactive leasing has reduced lease expiries in FY18 from 31.7% to 25.5%. However, looking at current FY16, 68 leases are expiring which is worrying.

FCOT 1Q2016 Lease Expiry

Things to Note

Developments at China Square Central

A 16 storey hotel will be build at China Square Central. Construction work will commence in 1Q2016 and expected to be completed by mid 2019.

Long WALE at Caroline Chisholm Centre

Long WALE of 9.5 years due to single occupancy by Commonwealth of Australia.