OUE Commercial REIT

OUE Commercial REIT 2H2020 Results

OUE Commercial REIT

OUE Commercial REIT has released its 2H2020 financial results on 28 January 2021. At this point of writing, unitholders would already seen the distribution being paid into your bank account.

Due to my busy work schedule, I was not able to look at OUE Commercial REIT’s performance when the financial results are released last month. I thought I should take a look since part of OUE Commercial REIT business is the hospitality sector whereby tourism has been badly hit by the COVID-19 pandemic. How is the REIT doing after 1 year on from the onset of the pandemic?

Let us take a look at the financial results below.

Gross revenue for 2H2020 declined slightly by 0.1% to S$150 million.

Net property income in 2H2020 was lower YoY due mainly to rental rebates granted to retail tenants to cushion the impact of business disruption due to COVID-19.

S$3.0 million was held for ongoing working capital purposes and S$5.8 million of distribution retained earlier in 1H 2020 was released. As a result, 2H2020 distribution is S$78.4 million,
translating to a DPU of 1.43 cents which was 12.3% lower as compared to 2H2019.

OUE Commercial REIT 2H2020 Financial Results

Gross Revenue150.0150.1(0.1)%
Net Property Income119.4120.6(1.0)%
Amount available for Distribution75.576.1(0.8)%
Ongoing working capital requirements(3.0)(1.5)
Distribution Released5.8
Distribution to Unitholders78.474.65.0%
Distribution Per Unit (“DPU”) (cents)1.431.63(12.3)%


Aggregate leverage increased to 41.2% as at 31 December 2020. OUE Commercial REIT has obtained S$900 million of facilities in December 2020 and successfully refinanced S$450 million of debt due in December 2021. There is still around 14% of debt due for refinancing in 2021 which should not be much of a concern.


The commercial portfolio occupancy stood healthy at 92.5% as of 31 December 2020. However, this was lower as compared to occupancy of 95.2% in December 2019.

OUE Commercial REIT Commercial Occupancy 2H2020

Average Passing Rent

Average passing office rent largely stable for Singapore office properties. OUE Downtown Office passing rent increased 6.5% QoQ to S$7.92 psf due to a significant lease renewal.

Average passing office rent for Lippo Plaza declined to RMB9.39 psm/day due to intense leasing competition amidst significant office supply.

Average retail rent at Mandarin Gallery remained stable.

OUE Commercial REIT Average Passing Rent 2H2020


The COVID-19 pandemic hits the RevPar significantly. This is because borders are closed and there is no demand.

For FY 2020, Mandarin Orchard Singapore’s RevPAR declined 65.4% YoY to S$75, while RevPAR for Crowne Plaza Changi Airport declined 39.8% YoY to S$118. Crowne Plaza Changi Airport performed better as it was able to serve the air crew and aviation segment due to its location in the airport vicinity.

The good news is for 4Q 2020, RevPAR for Crowne Plaza Changi Airport higher. This was mainly due to additional demand from the air crew segment as more flights resume. While staycations enjoy higher room rates, contribution from this segment is small due to limited capacity due to safe management measures.

OUE Commercial REIT RevPar 2H2020

Current Dividend Yield

Based on a full year DPU of 3.31 cents paid in FY19 and current share price of S$0.37, this translate to a current dividend yield of 8.95% which is a historical high yield.

OUE Commercial REIT Share Price 26 Feb 2021


The share price and DPU of OUE Commercial REIT remains depressed due to the impact of COVID-19 pandemic which has hit its hospitality businesses hard. We can see slight recovery in the latest quarter as some flights resume.

Even though the current dividend yield is at historical high, investors should be caution of the risks involved such as prolonged closure of international borders.

With vaccines rolling out in various countries, let us hope tourism industry can be revived soon.

One comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.