OUE Commercial Real Estate Investment Trust (OUE Commercial Reit) : TS0U 0% reported a 23.1 per cent increase in net property income to S$115.3 million for the first half of 2023, from S$93.6 million in the year-ago period. 

Revenue rose 19.8 per cent to S$138.8 million from a year ago, the manager announced on Wednesday (July 26).

OUE Commercial Reit’s H1 performance was based on higher contributions from its hospitality segment, which benefited from the recovery of Singapore’s tourism sector; its commercial segment rode on stable or improving occupancy and positive rental reversions. 

However, distributable income fell by 3.3 per cent on the year to S$57.6 million, mainly due to higher financing costs in an elevated interest rate environment and the absence of income support at OUE Downtown Office, the manager said. 

Consequently, there was a 2.8 per cent decrease in distribution per unit to S$0.0105 for the first half of 2023, from S$0.0108 in the previous period. 

Its office segment had an occupancy of 96.1 per cent as at Jun 30, with positive rental reversion of 8.1 per cent.

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Revenue from its hospitality segment rose 35.8 per cent year on year to S$45.8 million, driven by higher room rates, and supported by an influx of visitors from China and beyond.

Hilton Singapore Orchard’s H1 revenue per available room rose by 16.5 per cent to S$246; Crowne Plaza Changi Airport recorded a 54.1 per cent increase to S$207.

On the retail front, Mandarin Gallery’s committed occupancy, including short-term leases, reached 98 per cent as at Jun 30. Tenant sales in the second quarter remained stable at 83 per cent of pre-Covid-19 levels. 

OUE Commercial Reit has no further refinancing needs until 2025, with a weighted average term of debt at three years as at end-June. It will continue to take a prudent approach towards capital management, with aggregate leverage remaining stable at 39.1 per cent. 

Looking ahead, OUE Commercial Reit’s manager said its Grade-A office assets are well-positioned to weather market uncertainties due to their prime locations and well-diversified tenant mix. Meanwhile, its hotel properties are poised to capture the rebound in business and leisure travellers.

The manager will focus on prioritising occupancy at Lippo Plaza, its only property outside Singapore, against a backdrop of ample supply and dampened market confidence in Shanghai, China, where the property is located.