NET property income for OUE Commercial Reit (OUE C-Reit) fell 21.5 per cent to about S$48 million for the first quarter ended Mar 31, 2022, from S$61.1 million in the year-ago period.

This was mainly due to the deconsolidation of OUE Bayfront’s performance after the divestment of a 50 per cent stake in the property on Mar 31, 2021.

The drop in net property income was partly mitigated by lower rental rebates and lower property expenses, the real estate investment trust’s manager said in a quarterly business update on Thursday (May 12) evening.

Revenue tumbled by 20.3 per cent to S$59.5 million, down from S$74.7 million in the corresponding period last year.

The amount available for distribution shrank by 15.8 per cent year on year to S$31.2 million for the quarter, from S$37.1 million previously. The latest amount included the drawdown of income support at OUE Downtown Office, the share of joint venture results of OUE Bayfront, and lower interest expense.

In OUE C-Reit’s commercial segment, committed occupancy inched down by 0.3 percentage points quarter on quarter to 91.2 per cent as at Mar 31, 2022.

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Committed office occupancy in Singapore eased 0.4 percentage points to 90.8 per cent. Nonetheless, the average passing rents of all its Singapore office properties remained stable as of this March, the manager said.

Mandarin Gallery’s shopper traffic and tenant sales have rebounded to about 80 per cent of pre-pandemic levels. The mall’s committed occupancy increased 2 percentage points quarter on quarter to 88.7 per cent.

Over in Shanghai, leasing demand in Q1 this year was affected by Chinese New Year and the Covid-19 outbreak, the manager noted. Still, Lippo Plaza’s committed office occupancy was stable at 91.6 per cent, and again outperformed the overall Shanghai central business district Grade A office occupancy of 90 per cent.

In the hospitality segment, the property formerly known as Mandarin Orchard Singapore was relaunched as Hilton Singapore Orchard during the quarter. After a rebranding and extensive refurbishment, the property now houses 1,080 rooms and suites, new and enhanced Mice (meetings, incentives, conferencing, exhibitions) facilities, and revamped and new food and beverage offerings.

Although the latest easing of Covid-19 restrictions in April will support an uplift in inbound travel, visitor arrivals are not expected to return to pre-pandemic levels in the near term, the manager said.

It also flagged that the tight labour market and inflationary pressures pose additional challenges to the hospitality sector.

Units of OUE C-Reit : TS0U 0% finished S$0.015 or 3.7 per cent lower at S$0.395 on Thursday, before the business update was released.