OUE Commercial Reit's (OUE C-Reit) distribution per unit (DPU) for the first quarter ended March 31, 2016, jumped 33.3 per cent to 1.32 Singapore cents, up from 0.99 cent in the corresponding period a year ago.
Gross revenue more than doubled to S$42.91 million, as did net property income, which stood at S$33.26 million in Q1 2016.
The surge in gross revenue was due to the contribution from One Raffles Place, which was acquired in October 2015, as well as a better performance at OUE Bayfront.
Said Tan Shu Lin, CEO of OUE C-Reit's manager: "We are pleased that OUE C-Reit continued to deliver a good set of results in Q1 2016, with a 35.1 per cent year-on-year increase in amount available for distribution. This is underpinned by contribution from One Raffles Place, as well as continued organic growth from the initial portfolio comprising OUE Bayfront and Lippo Plaza.
"Despite the challenging environment, operational performance continued to be healthy, reflecting the quality and resilience of OUE C-Reit's portfolio."
Still, higher property operating expenses were incurred - mainly due to the inclusion of One Raffles Place's expenses, as well as higher property tax incurred at OUE Bayfront. These were partially offset by lower maintenance costs incurred at Lippo Plaza.
The group flagged Singapore's sluggish economic environment, which has weighed on office demand.
"Tenant demand from the oil and gas sector continued to be impacted, while occupiers from the information technology, e-commerce, insurance and pharmaceutical sectors remained active. As demand continues to be lacklustre, the completion of major new office developments from 3Q 2016 is expected to impact vacancy," said OUE C-Reit's manager.
Even so, barring any unforeseen event and unexpected deterioration in economic conditions, OUE C-Reit's financial performance is expected to remain stable this year, it added.