DBS maintains ‘Hold’ rating on OUE Commercial REIT citing industry headwinds

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DBS Investment Research has maintained a ‘Hold’ rating on Singapore office landlord OUE Commercial REIT in the wake of the latter’s 3Q 2017 results.

OUE Commercial REIT announced on 2 November that it has achieved a distribution per unit (DPU) of 1.15 Singapore cents for its 3Q 2017, a fall of 12.9% from what was recorded in the corresponding period of 2016.

This after the REIT’s gross revenue for the period fell by 2.1% year-on-year to SGD43.27 million, while net property income (NPI) slid by 3.5% to SGD34 million.

OUE Commercial REIT has attributed these results to lower retail rental income during the quarter arising from lower occupancy at One Raffles Place Shopping Mall.

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Ridzwan Rahmat has been analysing Singapore-listed REITs and business trusts, since 2008. For disclosure purposes, Ridzwan is currently vested in Mapletree Greater China Commercial Trust, Mapletree Industrial REIT and Mapletree Logistics Trust.

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