OUE Commercial REIT - Annual Report 2021

For OUE C-REIT’s commercial portfolio comprising office and retail leases, the weighted average lease term to expiry as at 31 December 2021 is 2.5 years. Hospitality Segment Accommodation demand in Singapore for 2021 continued to be impacted by border restrictions due to COVID-19. While refurbishment works progressed at the Orchard Wing of Mandarin Orchard Singapore, the Main Tower remained operational during the year. This allowed the property to capture demand from alternative sources such as workers affected by border shutdowns, inbound travellers and returning residents serving out quarantine requirements, as well as local residents for staycations. Crowne Plaza Changi Airport continued to benefit from demand from the aviation segment due to its strategic location in the airport vicinity. Consequently, FY 2021 revenue per available room ("RevPAR") for Mandarin Orchard Singapore declined 16.4% YoY to S$62 15 , while RevPAR for Crowne Plaza Changi Airport softened 6.7% YoY to S$110. Overall, the hospitality segment FY 2021 RevPAR was S$87, 2.5% lower YoY. To support a gradual resumption in international travel as global vaccination rates improve, Singapore has in late 2021 progressively rolled out quarantine- free travel corridors for vaccinated travellers from countries with low to moderate infection rates. The authorities have also piloted new protocols to allow vaccinated individuals to do pre-event testing for participation in a list of expanded activities, starting with selected meetings, incentives, conferences and exhibitions (“MICE”), spectator sports and live performances where capacity limits will be eased in a calibrated manner. This was kicked off with the Milken Institute Asia Summit and the Bloomberg New Economy Forum in November 2021. With the relaunch of Mandarin Orchard Singapore as Hilton Singapore Orchard in February 2022, the property is well- positioned to capture the gradual recovery in the hospitality segment. The recovery outlook for the hospitality segment depends on the magnitude of rebound in international tourism given Singapore’s limited scope for domestic demand. With countries worldwide grappling with secondary waves of COVID-19 infections in their path to normalisation, the United Nations World Tourism Organisation expects a further two to three years before international tourism returns to 2019 levels. OUE C-REIT’s hotel properties are under master lease arrangements (“MLAs”) where the total rent payable by the master lessees to OUE C-REIT is subject to a minimum rent. The minimum rent component of the MLAs amount to S$67.5 million per annum which provides significant downside protection in respect of OUE C-REIT’s hospitality contribution. Note: 15 Taking into account lower room inventory for Mandarin Orchard Singapore in FY 2021 due to renovation works for the re-branding to Hilton Singapore Orchard FY 2021 RevPAR Performance (S$) Hospitality Segment Mandarin Orchard Singapore Crowne Plaza Changi Airport 2.5% 16.4% 6.7% 87 110 62 90 118 75 FY 2021 FY 2020 35 A N N U A L R E P O R T 2 0 2 1