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Price was down since the news of the AEI in Aug and also recently down again after the news of the completion of the 12 rooms and the meeting room that cost 22 million for few months job. Only saw the news, does anyone have photos of the 22mil project? There are so many good news but share price kept dropping. Is there anything that we don't know?
The hotel properties are going to be a big boost for this REIT in 2024.
OUE Commercial REIT ready to receive travellers with renovated Hilton Singapore Orchard, Changi Airport hotel: UOBKH
OUE Commercial REIT (OUECT) completed enhancements for Hilton Singapore Orchard (HSO) in January 2023 and Crowne Plaza Changi Airport (CPCA) this month.
With these asset enhancement initiatives (AEI) in place, OUECT is ready to receive the rising numbers of leisure and business travellers visiting Singapore, says UOB Kay Hian Research (UOBKH).
In an unrated report dated Jan 19, UOBKH also notes that OUECT&rsquo s office portfolio is resilient, generating positive rental reversion at 18.4% and stable committed occupancy at 95.7% in 3Q2023.
CPCA completed its $22 million AEI this month. The enhancement added 12 new guest rooms, inclusive of two suites, to cater to higher-yielding long-stay guests and their families. The AEI also added a new all-day dining restaurant, Allora, offering Italian cuisine at the ground floor with direct access to and from Changi Airport Terminal 3.
CPCA also added a 352 sq m multifunction room to host a wide array of meetings and events, and the existing bar space has been transformed into a contemporary lounge with modernised space for meetings.
But HSO is OUECT&rsquo s largest revenue contributor. Mandarin Orchard Singapore was rebranded as Hilton Singapore Orchard in February 2022 and HSO was repositioned as a top luxury hotel in Singapore. It is Hilton brand&rsquo s flagship hotel in Singapore and its largest in the Asia Pacific.
HSO underwent three years of extensive refurbishment. The 634-room Mandarin Wing was relaunched in February 2022. The 446-room Orchard Wing was reopened in January 2023. HSO has operated with a full inventory of 1,080 rooms since January 2023. Contribution from HSO is expected to surpass the minimum rent of $45.0 million in FY2023.
Positive reversions
OUECT achieved positive rental reversion of 18.4% for office lease renewals in 3Q2023. Committed occupancy was healthy at 95.7%, notes UOBKH.
The average passing rent had increased 1.3% q-o-q to $10.35 per sq ft per month in September 2023. Mandarin Gallery&rsquo s committed occupancy improved 0.7 percentage point (ppt) q-o-q to 97.1%. The mall generated strong positive rental reversion of 31.1% due to recovery in retail sales and visitor arrivals.
OUECT is also riding on recovery in the hospitality sector, notes UOBKH. Revenue per available room (RevPAR) for the hospitality segment increased 12.8% y-o-y to $295 in 3Q2023. RevPAR for HSO expanded 3.8% y-o-y to $345 while RevPAR for CPCA jumped 9.6% y-o-y to $199.
Cost of debt and refinancing
S& P Global Ratings has assigned a BBB rating with stable outlook to OUECT and its $150 million 4.2% notes due in 2027. Under the terms and conditions of the notes, interest rate was stepped down by 25 basis points (bps) from 4.20% to 3.95% with effect from Nov 5, 2023.
OUECT&rsquo s subsidiary OUB Centre Limited has obtained an unsecured sustainability-linked loan (SLL) of $430 million to refinance existing borrowings and for general corporate purposes.
SSL accounted for 70% of its borrowings, one of the highest among S-REITs. OUECT&rsquo s weighted average term of debt has lengthened from 2.7 years to 3.2 years. It has no refinancing requirement until 2025.
OUECT has diversified exposures across the hospitality, office and retail segments, which accounted for 35%, 48% and 17% of revenue respectively, says UOBKH.
It has three office assets, two hotels and one downtown retail mall in Singapore and one office asset in Shanghai, China. &ldquo OUECT would benefit from a recovery in the hospitality sector and resilience of the office market in Singapore,&rdquo says UOBKH.
This REIT was hit particularly hard in the past few months because there were OUE family contagion concerns. This has turned out not to be the case, so the price reversal is correspondingly strong.
All reits went up after fed reserve announced next year rate cut. Now fed rate 5.5%. Projection rate from fed, End 2024 will be 4.6%. End 2025 3.6%. End 2026 2.9%. Wondering if really interest rate down, how much will Oue C be? By then putting into fixed deposit, ssb, tbill, etc won't give such a high return as the dpu of all reits now.
Well personally I entered because of the huge sell off arising from the Nigeria saga. Suffice to say I hold the view that it should emerge from the saga relatively positive. They may have to pay a fine or not at all and what?s not but with the huge discount, current price may worth a look. And buying in few batches should provide more buffer of safety in case price stuck at current level or even go down more. Risk further mitigated by annual dividend so as long as our holding power is ok, it is worth taking a look. Of course this is solely personnel view and should not be construed as buying advice. Please do own due diligence.
Smallinvestor ( Date: 12-Dec-2023 15:37) Posted:
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Olam can buy? Saw some news on The Edge Singapore -Olam Group denies fraud allegations reported in African publications. Price kept falling also earning affected by higher cost.
HVRRVH ( Date: 11-Dec-2023 10:56) Posted:
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Decided to lock in 6.25 cents or 4.3k or about 28% profit, as yearly DPU is at most 6-7% so thank you OUE Com. Likely to recycle fund to OLAM.
HVRRVH ( Date: 01-Nov-2023 11:48) Posted:
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Recent high $0.26.
Now retract to $0.245. Buying now for rebound.
If this REIT caanot survive I wonder which one can.
All quality assets in SIngapore. Orchard Road, Changi Airport etc
Now retract to $0.245. Buying now for rebound.
If this REIT caanot survive I wonder which one can.
All quality assets in SIngapore. Orchard Road, Changi Airport etc
Many have missed the boat. )
In the last 3 months the share price of this REIT fell by more than a third, far greater than the peer group. Attributing the decline in the sector as a whole relates to the recent increase in long term US govt yields, I think the greater than average decline in this REIT relates to specific concerns the market has about OUE universe companies. At least with respect to this REIT, I think the recent results should dispel these concerns. This was the point I was making.
I am not ruling out the possibility that the CPI report might be " super bad" , nor that were this to happen the market reaction to this induces selling to push the price back down to 20 cents. However, were this to happen I don' t think it would be merited, especially as I have a view that, looking beyond near term CPI reports, I don' t think the current level of long term US govt yields will last.
I am not ruling out the possibility that the CPI report might be " super bad" , nor that were this to happen the market reaction to this induces selling to push the price back down to 20 cents. However, were this to happen I don' t think it would be merited, especially as I have a view that, looking beyond near term CPI reports, I don' t think the current level of long term US govt yields will last.
wait the CPI report super bad another panic selling to 20 cents again.. what' s make u so sure CPI report will not be back and panic selling will not return?
The results appear to confirm that everything is fine and recent sellers were panicking unnecessarily.
Now my entry timing look ok. With dpu coming up in few months time. Best case scenario the price go back up to above 30 cents. I can dream with the help of Fed halting rate and start cutting next year.
Hahahahaha. Better than bed wetting. Price now already not bad. Heng got average down. Good to sleep again then wake up. Can trade few times.
Secret_Squirrel ( Date: 01-Nov-2023 16:36) Posted:
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Hopeful it wake up and continue to rise, not just wake up to go toilet , then go back to sleep. Lol
Smallinvestor ( Date: 01-Nov-2023 15:21) Posted:
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Finally, oue c reit wake up.
Last Q NPI increased but DPU dorpped, citing higher interest/financial cost. Not too optimistic with this but prepared to hold for at least 24 months so let' s see how much is the upcoming dividend.
HVRRVH ( Date: 19-Sep-2023 09:41) Posted:
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OUE C-Reit net property income up 29.8% in Q3
MAINBOARD-LISTED OUE Commercial Real Estate Investment Trust : TS0U -2.17% (Reit) on Monday (Oct 30) reported a 29.8 per cent increase in its net property income (NPI) to S$62.7 million for the third quarter ended Sep 30, from S$48.3 million in the year-ago period.
Revenue rose 27.5 per cent year-on-year to S$75.8 million, from S$59.5 million.
The growth was driven by overall improvements in the Reit&rsquo s portfolio, especially in the hospitality sector as Singapore&rsquo s tourism industry recovers post-pandemic, the manager said in a business update.
In the hospitality segment, NPI rose 73.2 per cent year-on-year to S$27 million. Revenue grew 67.6 per cent year-on-year to S$28.3 million.
Revenue per available room was up 12.8 per cent year-on-year to S$295.
The manager attributed part of the better performance to the five-star Hilton Singapore Orchard hotel, which was operating a total inventory of 1,080 rooms in Q3, from 634 rooms a year ago.
It added that asset enhancement is ongoing for the four-star Crowne Plaza Changi Airport hotel. This includes the addition of 12 guest rooms, an &ldquo extensive&rdquo revamp of its dining restaurant, and the creation of new meeting facilities.
The works are expected to be completed by December 2023 to &ldquo capture the rebound in both business travellers and tourist arrivals&rdquo in the following year, said the manager. &ldquo (This) is expected to be DPU-accretive (distribution per unit) with an estimated capital expenditure of approximately S$14 million and an expected stabilised return on investment of approximately 10 per cent.&rdquo
Meanwhile, the Reit&rsquo s commercial segment, which includes both office and retail sectors, posted a 9.1 per cent year-on-year increase in NPI to S$35.6 million in Q3. Revenue climbed 11.6 per cent year-on-year to S$47.5 million.
This was mainly due to better performance in its Singapore portfolio, said the Reit&rsquo s manager.
Committed occupancy of the city-state&rsquo s office properties remained &ldquo healthy&rdquo at 95.7 per cent. Average passing rent inched up 1.3 per cent quarter-on-quarter to S$10.35 per square foot in Q3 per cent due to positive rental reversions from past consecutive quarters.
The Reit also recorded a high rental reversion of 31.1 per cent in its retail properties on the back of recovery in tourist arrivals and improving retail sales, it said.
As at end-September, aggregate leverage remained stable at 39.4 per cent, with the weighted average cost of debt at 4.2 per cent per annum, said the manager. It added that the Reit has no refinancing needs until 2025, with the weighted average term of debt at 2.7 years.
Han Khim Siew, chief executive officer of the manager, noted that finance costs will continue to present headwinds due to elevated borrowing costs. &ldquo (But) we remain cautiously optimistic that the impact on distribution will be mitigated by the portfolio&rsquo s healthy revenue and NPI growth, coupled with our prudent capital management approach.&rdquo