OUE Hospitality Trust – Building On Trust

Just last week, I received the hard copy of OUE Hospitality Trust 2017 annual report in my letter box. The cover page was eye catching. It says “Building On Trust“.

For my own tracking of OUE Hospitality Trust’s performance, I summarize the important points and categorize them into two categories: The Positives and The Negatives. Among the positives, I personally like OUE HTrust for having no loan due until December 2020.

Personally, I think whether OUE Hospitality Trust can earn your trust will really depend if it can continue to grow its Distribution Per Unit (“DPU”) in FY18. Getting more distribution per unit is why we invest in REITs, isn’t it? Read More

Which REIT Can Grow Their DPU Over The Years?

Most of us invest in REITs for their dividend yield but what makes a REIT exceptional is the ability of the REIT manager to grow the distribution per unit (DPU) over the years.

Below are the REITs with their annual historical distribution (in cents) I have held in my stock portfolio. The historical distribution can be easily found from the individual REIT website.

As you can see from the line chart I plotted above using the historical distribution, Parkway Life REIT and Frasers Commercial Trust have been able to grow their DPU consistently over the years as the line shows a gradual incline slope. Mapletree Commercial Trust should be able to form an incline slope as well but the line shows a decline because the 4Q2017 results are not yet announced.

Distribution per unit (DPU)for CapitaMall Trust and Suntec REIT looks rather flat over the last few years which reflects the current outlook for shopping malls.

Distribution per unit (DPU)for OUE Hospitality Trust declines as compared to FY14.

As you can see, by plotting the chart, it gives us a high level overview which are the REITs that is capable of growing their DPUs 5 years or more.

FY12 FY13 FY14 FY15 FY16 FY17 % Growth
ParkwayLife Reit 10.31 10.75 11.52 13.29 12.12 13.35 29.5%
CapitaMall Trust 9.46 10.27 10.84 11.25 11.13 11.16 18.0%
Mapletree Commercial Trust 6.487 7.372 8 8.13 8.62 6.77 ** 4.4%
OUE Hospitality Trust NA 2.9 6.74 6.55 4.61 5.14 (23.7)% ^
Frasers Commercial Trust 6.69 7.83 8.51 9.71 9.82 9.82 46.8%
Suntec Reit 9.49 9.328 9.4 10.002 10.003 10.005 5.4%

^ Based on FY14 to FY17 since IPO in FY17

** Not the full year results.

Will Growth Continue For OUE Hospitality Trust After 4Q2017

OUE Hospitality Trust Logo

The last time I reviewed OUE Hospitality Trust was last year May 2017 ( OUE Hospitality Trust 1Q2017 Results – Signs of Recovery? ). OUE Hospitality Trust released their 4Q2017 financial results on 30th January 2018 however I only managed to take a look at it recently. I am glad that their Hospitality segment recorded higher income due to better operating performance of Mandarin Orchard Singapore and full-year contribution from the enlarged 563-room Crowne Plaza Changi Airport.

Annual Distribution per unit increased 11.5% from 4.61 cents to 5.14 cents. This gem has finally reviewed its shine and I hope this continues over the next quarters. Will it? Read More