OUE Hospitality Trust (OUEHT) reported an inline set of 3Q15 results, with gross revenue and DPU increasing by 14.6% and 4.6% YoY to S$32.7m and 1.72 S cents, respectively. Growth was underpinned largely by contribution from Crowne Plaza Changi Airport Hotel (CPCA), which was acquired on 30 Jan this year. NPI from Mandarin Orchard Singapore Hotel (MOS) and OUEHT’s retail segment was flat on a YoY basis.

For 9M15, OUEHT’s gross revenue rose 7.1% to S$91.6m and this formed 74.4% of our FY15 forecast. However, DPU of 4.85 S cents represented a decline of 2.2% but made up 75.2% of our full-year forecast. On an encouraging note, RevPAR for MOS inched up 0.8% YoY to S$243, while that of CPCA jumped 8.2% QoQ to S$250 (no YoY figures were available).

Looking ahead, management expects the tourism industry to continue facing headwinds given the uncertain economic landscape, relatively strong SGD and competition from new hotel supply. We maintain our HOLD rating but will review our S$0.88 fair value estimate.

Source: OCBC Research - 13 Nov 2015