OUE C-Reit posts H1 DPU of 1 Singapore cent; retains S$13.8m for 'financial flexibility'

OUE Commercial Real Estate Investment Trust (C-Reit) on Thursday posted a distribution per unit (DPU) of one Singapore cent for the half-year ended June 30, 40.5 per cent lower than a year ago.

It said it had retained S$13.8 million of distribution to "preserve financial flexibility" amid the Covid-19 pandemic. 

OUE C-Reit has a semi-annual distribution policy; unitholders can expect the distributions to be paid on Sept 11. 

Revenue for the second quarter had risen 23.9 per cent on the year to S$64.3 million, resulting in a 32.4 per cent year-on-year (y-o-y) increase in H1 revenue to S$142 million. 

Net property income for Q2 increased 23.7 per cent on the year to S$50.4 million, due to the contribution from the merger with OUE Hospitality Trust last year, although this was partially offset by rental rebates to tenants.

For H1, net property income thus rose 33.4 per cent y-o-y to S$112.5 million. 

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However, the Reit's manager said that while the Covid-19 situation has largely stabilised in Singapore and China for now, it will continue to monitor the situation, and is prepared to introduce further initiatives to support OUE C-Reit's tenants as required.

It also noted "protracted containment measures and weaker global conditions". The manager has thus opted to retain S$13.8 million of distributions to "preserve financial flexibility".

In Q2, OUE C-Reit's hospitality segment - contributed by the merger with OUE Hospitality Trust - recorded S$16.9 million in revenue. Revenue per available room (RevPAR) for the segment was 71.7 per cent lower y-o-y in Q2 at S$55, due to travel restrictions arising from the pandemic. 

In the commercial segment, revenue declined 8.6 per cent on the year to S$47.4 million. The Reit has committed about S$13.8 million of rental rebates to date, excluding an estimated S$19.9 million of support from the Singapore government, comprising property tax rebates and mandated share of relief for small and medium-sized enterprises. 

Committed occupancy for the commercial segment declined 2.7 percentage points (ppt) quarter on quarter to 91.6 per cent as at June 30.

The Singapore portfolio's committed office occupancy slid 2 ppt quarter on quarter to 93.7 per cent in Q2, as leasing momentum was dampened by the weak economic outlook and the suspension of leasing activities during the "circuit-breaker" period, the Reit said.

The Singapore office properties have continued to achieve positive office rental reversions of 6.8 per cent to 14.8 per cent during Q2, however.

Units of OUE C-Reit closed up 2.56 per cent at S$0.40 on Thursday before the announcement.