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) | 1Q2022 | 4Q2021 | %q-o-q | 1Q2021 | % y-o-y |
| Revenue | 59.5 | 57.8 | 3% | 74.7 | -20.3% |
| NPI | 48.0 | 49.0 | -2% | 61.1 | -21.5% |
| Share of JV results | 4.2 | 5.2 | n/a | n/a | n/a |
| DI | 31.2 | 44.6 | -30% | 37.1 | -15.8% |
| DPU * | 0.57 | 0.82 | -30% | 0.68 | -16.2% |
| Gearing | 39.4% | 38.7% | 0.7 ppt | 40.4% | -1 ppt |
| Average cost of debt | 3.00% | 3.20% | -0.2 ppt | 3.10% | -0.1 ppt |
| ICR | 2.9 | 2.7 | 0.2 | 2.6 | 0.3 |
* * estimated quarterly DPU
Source: Company, DBS
| Key Operational Data | 1Q2022 | 4Q2021 | %q-o-q | 1Q2021 | % y-o-y |
| Portfolio occupancies* | 91.2% | 89.6% | 1.6 ppt | 91.7% | -0.5 ppt |
| – Office* | 92.1% | 92.5% | -0.4 ppt | 91.7% | 0.4 ppt |
| – Retail | 88.7% | 86.7% | 2 ppt | 91.8% | -3.1 ppt |
| WALE (years) | 3.40 | 3.50 | -0.1 | 3.30 | -3.4 |
| – Office | 2.40 | 2.40 | 0.0 | 2.20 | -2.2 |
| – Retail | 2.50 | 2.50 | 0.0 | 2.40 | -2.4 |
| Av signing rents | |||||
| – SG (S$) | 8.17 to 13.25 | 7.50 to 15.00 | 7.50 to 12.70 | ||
| – CN (RMB) | 9.57 | 8.10 to 11.00 | 8.76 to 10.00 | ||
| Lease expiries/Rent Reviews in FY2022 by Gross Rent | 22.5% | 22.5% | 0 ppt | 21.6% | 0.9 ppt |
| – Office | 9.9% | 13.3% | -3.4 ppt | 27.7% | -17.8 ppt |
| – Retail | 2.7% | 3.4% | -0.7 ppt | 20.7% | -18 ppt |
| Lease expiries/Rent Reviews in FY2023 by Gross Rent | 22.9% | 22.0% | 0.9 ppt | 17.4% | 5.5 ppt |
| – Office | 12.6% | 11.9% | 0.7 ppt | 22.3% | -9.7 ppt |
| – Retail | 4.4% | 4.4% | 0 ppt | 24.4% | -20 ppt |
| Rental Reversions | -5.9% to 2.5% | -5.0% to 9.5% | n/a | 0.8% to 7.2% | n/a |
| Revpar (S$) | 113 | 113 | 0% | 52 | 117.3% |
*4Q21 portfolio / office occupancy are simple average
Source: Company, DBS