OUE Hospitality Trust’s (OUEHT) 4Q18 results were within expectations. 4Q18 gross revenue dropped 2.2% YoY to S$33.1m while NPI dropped 1.0% to S$28.9m due to lower income from the hospitality segment, partially offset by a higher retail contribution. 4Q18 DPU increased 0.8% to 1.28 S cents while FY18 DPU dropped 2.9% YoY to 4.99 S cents or 100% of our fullyear forecast.

Mandarin Orchard Singapore’s RevPAR was up 1.6% to S$229 for the quarter while Crowne Plaza Changi Airport’s RevPAR (CPCA) was up 2.1% YoY to S$180. However, NPI for MOS was down 2.4% due to lower banquet sales.

We note that the Grand Ballroom at MOS has just reopened yesterday. We continue to find the REIT’s current price attractive.

We maintain BUY but place our fair value of S$0.79 under review pending more details.

Source: OCBC Research - 30 Jan 2019