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OUE C-Reit Q1 DPU rises 47.5% to 0.9 Singapore cent

OUE Commercial Reit (OUE C-Reit) on Thursday posted a distribution per unit (DPU) of 0.90 Singapore cent for the first quarter ended March 31.

This was 47.5 per cent higher than the restated DPU of 0.61 cent for Q1 2018, which was restated to include new units issued in October 2018.

Gross revenue rose 25.5 per cent to S$55.3 million compared to the year-ago period, and net property income (NPI) climbed 23.5 per cent to S$43.6 million.

The trust manager attributed the rise to a full quarter's contribution from the office components of OUE Downtown, acquired in November 2018, as well as one-off income from its other Singapore properties.

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The amount available for distribution was about S$26 million, up 49.5 per cent from a year ago.

No distribution was declared for the current financial period, the same as for the corresponding period of the previous financial year.

The trust manager said that committed office occupancy for OUE Bayfront and One Raffles Place as at March 31 remains healthy at 97.1 and 96.5 per cent respectively, ahead of Singapore's core central business district (CBD) occupancy of 95.2 per cent. At OUE Downtown, it continues to pursue its strategy of maximising rents while optimising occupancy, which stands at 93.9 per cent.

In Shanghai, Lippo Plaza's committed occupancy of 90.4 per cent was ahead of overall Shanghai CBD Grade A market occupancy of 87.6 per cent. Committed rents continued to be in line with or higher than market rates, the manager added.

Recent increases in Singapore's Grade A CBD core office rents have significantly narrowed the gap between market rents and expiring rents at OUE C-Reit's properties here, and the trust manager continues to expect positive operational performance in 2019.

Meanwhile, rental growth in the Shanghai market is expected to be subdued in the near term, due to new supply scheduled in 2019 as well as softer demand from a slower economy. "As supply abates in the longer term from 2020, stable demand is expected to underpin steady rental growth," the manager said.

Units of OUE C-Reit closed at S$0.50 on Thursday, up 0.5 Singapore cent or 1.01 per cent before results were announced.