CGS-CIMB Research is keeping its “hold” recommendation on OUE Commercial REIT (OUE C-REIT) with an unchanged target price of 48.2 cents, as there is limited scope for outperformance in the near term with the continued challenging hospitality earnings outlook.

This came following the REIT posting a 40.5% y-o-y drop in its 1H20 DPU to just 1.0 cent from 1.68 cents in 1H19. But distributable income was 12.2% higher y-o-y at $54.5 million.

The manager of the REIT said that the drop in DPU was despite the higher amount distributable to unitholders is $13.8 million of distribution comprising tax-exempt income and capital distribution was retained to preserve financial flexibility in view of uncertainties posed by the Covid-19 situation.

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