Summary of REITs Financial Results in 1Q2016

Most or all of the REITs in my portfolio have completed announcing their 1Q2016 results. There are some hits and some misses. As shown in the table I summarized below, Distribution Per Unit (“DPU”) increases for 6 out of 11 REITS I am holding while DPU fell for the other 5.

DPU fell for those REITs that focuses on a single industry sector such as industrial, retail or office. REITs like Suntec REIT which has a combination of office and retail survived the economy downturn. Mapletree Commercial Trust did fairly well too as it has a combination of office and retail (Vivocity).

Those with overseas assets did well too. Frasers Commercial Trust has both Singapore and Australian properties. Lippo Malls Indonesia Retail Trust did well as its malls are in Indonesia.

Having said so much, I just want to highlight the importance of diversification of portfolio.

Stock Name

Date Of Release

Of

Financial Results

Dividend Per Unit (DPU)

Increase or Fall

Frasers Commercial TrustWednesday, 20 January 2016DPU Increase
CapitaMall TrustFriday, 15 April 2016DPU Increase
Keppel ReitThursday, 14 April 2016DPU Fall
Soilbuild Business ReitThursday, 14 April 2016DPU Fall
Suntec REITThursday, 21 April 2016 DPU Increase
Mapletree Commercial TrustTuesday, 26th April 2016  DPU Increase
Parkway Life ReitTuesday, 26th April 2016  DPU Fall
Far East Hospitality TrustWednesday, 27th April 2016  DPU Increase
Cambridge Industrial TrustThursday, 28th April 2016  DPU Fall
Lippo Malls Indonesia Retail TrustTuesday, 3rd May 2016  DPU Increase
OUE Hospitality TrustFriday, 6th May 2016DPU Fall

CIMB Bank 6 Months Fixed Deposit Promotion May 2016

CIMB Fixed Deposit Promotion May 2016

CIMB Bank is having a fixed SGD deposit promotion in the month of May. The promotion is only valid from 1st May 2016 to 31st May 2016. Enjoy 1.60% interest rate for only a 6 month tenure. Personally feel that this is pretty attractive given the short period of 6 months.

If you put S$20,000 for 6 months at an interest rate of 1.6% per annum, the interest amount you get is S$160.

12 months6 months
S$20,000 and above1.751.60
S$100,000 and above
(CIMB Preferred customers only)
1.801.65

OUE Hospitality Trust DPU Fell for 1Q2016

OUE Hospitality Trust Logo

OUE Hospitality Trust announces its 1Q2016 financial results on 6th May 2016. Gross revenue increases by 2.8%. The total gross revenue can be broken down into the hospitality segment and retail segment. Gross revenue for the hospitality segment increases by 11.5% while gross revenue for the retail segment fell as much as 16.3%.

Retail revenue for 1Q2016 was $1.5 million lower than 1Q2015 mainly due to landlord fit out periods for incoming tenants and lower average occupancy rate.

Distribution Per Unit (“DPU”) fell by as much as 31.7% from 1.61 cents to 1.10 cents. The issuance of rights have been factored in.

1Q FY16
(S$’000)
1Q FY15
(S$’000)
YoY(%)
Gross Revenue (Hospitality)22,39520,07711.5
Gross Revenue (Retail)7,7539,260(16.3)
Gross Revenue (Total)30,14829,3372.8
Net Property Income26,29325,7152.2
Distributable Amount19,70021,386(7.9)
Distribution Per Unit (“DPU”) (cents)1.101.61(31.7)

Debt

Gearing ratio stood at 42.2% which is extremely high. With the completion of the rights issue, the gearing ratio now stood at 37.9%. Weighted average debt maturity stood at 2.8 years. From the chart below, we can see S$293 million loan maturing in 2016. This is a bit worrying as I wonder how it will refinance the loan?

OUE HTrust 1Q2016 Debt Maturity

Net Asset Value

Net asset value is S$0.89.

Lease Expiry Profile

The Weighted Average Lease Expiry (“WALE”) by gross rent stood at 4.5 years while by Net Lettable Area (“NLA”) stood at 3 years. In Mandarin Gallery, occupancy is approximately 88% committed. Michael Kors is expected to open in 3Q2016 and Victoria’s Secret is expected to open in 4Q2016.

Mandarin Gallery Lease Expiry Profile 1Q2016

Things to Note

Tourism Boost

STB has forecasted a growth of 0% to 3% for visitor arrivals and 0% to 2% for tourism receipts in 2016. Singapore government has also set aside $700 million in a Tourism Development Fund to be invested from 2016 to 2020.

Crowne Plaza Changi Airport Extension (CPEX)

OUE H-Trust expects to acquire the 243-room CPEX in 2H2016 following the completion of the construction of the extension and upon receipt of the temporary occupation permit.

Reputable Brands Opening in Mandarin Gallery

Michael Kors and Victoria’s Secret are expected to open in 3Q2016 and 4Q2016 respectively, and both tenants account for approximately 15% of the mall’s net lettable area. Mandarin Gallery is expected to record lower average occupancy in FY2016 due to slower renewal of leases.