OUE Reit posts 8.4% rise in Q1 NPI to S$57.6 million

[SINGAPORE] The manager of OUE Real Estate Investment Trust (Reit) posted an 8.4 per cent rise in net property income (NPI) to S$57.6 million for its first quarter ended Mar 31, from S$53.2 million in the year-ago period.

Revenue was up 6.7 per cent at S$70.5 million from S$66 million previously.

The improvements were mainly driven by strong year-on-year (yoy) growth in the hospitality segment and resilient operating performance from the commercial portfolio, said the manager in a business update on Tuesday (Apr 21).

Revenue for the Reit’s hospitality segment increased 15.1 per cent on the year to S$26.8 million in Q1. NPI rose 16.8 per cent on the year to S$24.3 million.

Growth was mainly due to proactive revenue management and refreshed offerings, alongside an improved meetings, incentives, conferences and exhibitions, or Mice, pipeline.

Such events included the biennial Singapore Airshow and the maiden voyage of Disney Adventure – Asia’s first Disney cruise – from the Republic.

Revenue per available room (RevPAR) grew 11.7 per cent in Q1 to S$277 from that in the corresponding period last year.

Hilton Singapore Orchard’s RevPAR increased by 11.2 per cent on the year to S$277 amid higher occupancy, while Crowne Plaza Changi Airport’s RevPAR rose 11.7 per cent to S$276, underpinned by higher transient demand and stable corporate bookings.

OUE Reit’s commercial segment recorded a 2.2 per cent increase in revenue to S$43.6 million, and 3 per cent growth in NPI to S$33.3 million.

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This was underpinned by higher average passing rents from consecutive quarters of positive rent reversion across the commercial portfolio.

As at Mar 31, the Reit’s Singapore office portfolio had a positive rental reversion of 6 per cent for office lease renewals, while average passing rent edged up 0.2 per cent on the quarter to S$11 per square foot (psf) per month. Committed occupancy held steady at 95.2 per cent.

Retail property Mandarin Gallery recorded positive rental reversion of 3.8 per cent in Q1. Average passing rent rose 2.4 per cent on the quarter to S$22.98 psf per month. Committed occupancy remained stable at 95.6 per cent as at end-March.

“Proactive capital management”

Meanwhile, the manager added that proactive capital management reduced the weighted average cost of debt to 3.7 per cent per annum as at Mar 31, 2026, from 3.9 per cent per annum as at Dec 31, 2025.

Financing costs fell 17.8 per cent yoy to S$17.2 million in Q1.

Aggregate leverage rose to 41.5 per cent, from 38.5 per cent as at end-December. This followed the acquisition of a 19.9 per cent stake in Salesforce Tower in Sydney and drawdowns for payment of distributions to unitholders.

“Looking ahead, our portfolio fundamentals remain resilient, underpinned by the continued attractiveness of Singapore and Sydney as safe-haven markets amid heightened global uncertainty,” said Han Khim Siew, CEO of the Reit’s manager.

He added: “We will continue to advance our Phase 3 Value Creation Journey with a focus on disciplined capital allocation, active asset management and long-term value creation for unitholders.”

Units of OUE Reit ended Tuesday 1.4 per cent or S$0.005 higher at S$0.37, before the announcement.