1Q22 Business Update: All set for the great reopening

  • 1Q22 est DPU -16% y-o-y to 0.57 Scts mainly due to the partial divestment of OUE Bayfront, 23% of our FY22F core DPU estimates.
  • Key positive: i) Portfolio occupancy inched up led by Mandarin Gallery, ii) tenant sales improved to c.80% in Mar22, iii) office reversions stable though lower due to higher expiring rents
  • Key negatives: i) RevPAR was stable q-o-q but expect stronger recovery with the reopening of Hilton Singapore Orchard in Feb22, ii) negative reversions at OUE Downtown
  • Maintain BUY; TP of S$0.50. 1Q22 operational performance appears to be stable and poised for further recovery as we return to normalcy. 
Summary of results (S$’m)1Q20224Q2021%q-o-q1Q2021% y-o-y
Revenue59.557.83%74.7-20.3%
NPI48.049.0-2%61.1-21.5%
Share of JV results4.25.2n/an/an/a
DI31.244.6-30%37.1-15.8%
DPU *0.570.82-30%0.68-16.2%
Gearing39.4%38.7%0.7 ppt40.4%-1 ppt
Average cost of debt3.00%3.20%-0.2 ppt3.10%-0.1 ppt
ICR2.92.70.22.60.3

* * estimated quarterly DPU

Source: Company, DBS

Key Operational Data1Q20224Q2021%q-o-q1Q2021% y-o-y
Portfolio occupancies*91.2%89.6%1.6 ppt91.7%-0.5 ppt
– Office*92.1%92.5%-0.4 ppt91.7%0.4 ppt
– Retail88.7%86.7%2 ppt91.8%-3.1 ppt
WALE (years)3.403.50-0.13.30-3.4
– Office2.402.400.02.20-2.2
– Retail2.502.500.02.40-2.4
Av signing rents     
– SG (S$)8.17 to 13.257.50 to 15.00 7.50 to 12.70 
– CN (RMB)9.578.10 to 11.00 8.76 to 10.00 
Lease expiries/Rent Reviews in FY2022 by Gross Rent22.5%22.5%0 ppt 21.6%0.9 ppt 
– Office9.9%13.3%-3.4 ppt 27.7%-17.8 ppt 
– Retail2.7%3.4%-0.7 ppt 20.7%-18 ppt 
Lease expiries/Rent Reviews in FY2023 by Gross Rent22.9%22.0%0.9 ppt 17.4%5.5 ppt 
– Office12.6%11.9%0.7 ppt 22.3%-9.7 ppt 
– Retail4.4%4.4%0 ppt 24.4%-20 ppt 
Rental Reversions-5.9% to 2.5%-5.0% to 9.5%n/a0.8% to 7.2%n/a
Revpar (S$)1131130%52117.3%

*4Q21 portfolio / office occupancy are simple average 

Source: Company, DBS