OUE Commercial REIT - Annual Report 2021

LETTER TO UNITHOLDERS OUE C-REIT’s Singapore office portfolio committed occupancy eased 2.9 percentage points (“ppt”) YoY to 91.2%. Nevertheless, average passing rents for the Singapore office portfolio as of December 2021 were higher YoY due to positive rental reversions achieved in past consecutive quarters. At Mandarin Gallery, the committed occupancy declined 4.4 ppt YoY to 86.7% as at 31 December 2021. Including short-term leases to support tenants’ space requirements given the uncertain operating environment, committed occupancy was 94.3%. Part of the decrease in committed occupancy was due to the repositioning of certain spaces to enhance the tenant mix with more food & beverage (“F&B”) options. This is expected to strengthen the appeal of the mall and support an occupancy uplift once works are completed. Due to the sustained challenges faced by the prime retail segment, the average passing rent of the property declined 6.9% YoY to S$20.88 psf per month as of December 2021. With progressively relaxed social restrictions on group sizes and dining-in, we were able to organise, in the second half of 2021, more promotional events both online and offline. As a result, shopper traffic and sales at Mandarin Gallery recovered to approximately 75% and 65% of pre-COVID levels respectively in December. As Singapore continues on its path to COVID-resilience and progressively eases its border measures, a gradual return of tourists is expected to augment traffic and sales. Supported by the Manager’s focus on prioritising occupancy, Lippo Plaza’s committed office occupancy improved 5.3 ppt YoY to 91.8% as at 31 December 2021 on the back of strong leasing demand in Shanghai’s Central Business District (“CBD”) Grade A office market. Amidst stiff leasing competition amongst landlords given the significant supply increase in the market, the average passing office rent declined 4.2% YoY to RMB 9.00 per square metre per day as of December 2021. HOSPITALITY SEGMENT – POSITIONED FOR RECOVERY Limited tourist arrivals impacted demand for OUE C-REIT’s hotel properties in FY 2021. With the Orchard Wing of Mandarin Orchard Singapore closed for major refurbishment since February 2021, the Main Tower catered to local demand from staycations, workers affected by border shutdowns as well as inbound travellers and returning residents serving out quarantine orders. At the airport, Crowne Plaza Changi Airport served the aviation segment. Overall, the revenue per available room (“RevPAR”) achieved for the hospitality segment was S$87, declining from S$90 for FY 2020. Nonetheless, contribution from the hospitality segment was protected by the minimum rent under the hotel master lease agreements. We have relaunched Mandarin Orchard Singapore as Hilton Singapore Orchard on 24 February 2022. It is Hilton’s flagship hotel in Singapore and its largest in Asia Pacific, offering 1,080 guest rooms and suites, new meetings, incentives, conferences and exhibitions facilities as well as exciting F&B offerings. The property is well-positioned to capture the nascent recovery in the hospitality segment. REINFORCING OUR CAPITAL STRUCTURE During the year, the Manager undertook several initiatives to strengthen OUE C-REIT’s capital structure, increase financial flexibility and diversify funding sources in keeping with its prudent and proactive approach to capital management. We have relaunched Mandarin Orchard Singapore as Hilton Singapore Orchard on 24 February 2022. It is Hilton’s flagship hotel in Singapore and its largest in Asia Pacific, offering 1,080 guest rooms and suites, new MICE facilities and exciting F&B offerings. The property is well- positioned to capture the nascent recovery in the hospitality segment. 18 O U E COMM E R C I A L R E I T