Excerpts from CIMB Research report OUE Commercial REIT (SGX:TSOU)

• OUE Commercial Reit (OUECT)’s 1H22 DPU of 1.08 Scts came in below at 39.9% of our FY22F.
• Strong recovery in the hospitality and retail portfolio, while healthier office occupancy and limited supply give OUECT the ability to drive rents.

Reiterate a Hold rating with a lower DDM-based TP of S$0.39. OUE Commercial Reit 1HFY22 results highlights OUECT’s 1HFY22 revenue/NPI of S$115.8m/S$93.6m were down 13.3%/14.2% yoy, below at 46.3%/47.2% of our FY22F estimate. Lower revenue was due to S$5m in rental rebates at Lippo Plaza due to lockdowns in Shanghai in Apr-May 22 and deconsolidation of OUE Bayfront upon divestment of a 50% stake on 31 March 21 vs. one quarter of contribution in 1H21. 1H22 DPU of 1.08 Scts (-12.2% yoy) missed at 39.9% of our forecast. Hospitality and retail segments nearing pre-COVID trading levels RevPAR at Hilton Singapore Orchard (HOS) tripled qoq to S$302 as tourist numbers picked up, doubling portfolio RevPAR to S$226. Occupancy and average...