OUE Reit Q3 net property income drops 3.7% to S$60.3 million

OUE Real Estate Investment Trust (Reit) reported a 3.7 per cent dip in net property income in the third quarter to S$60.3 million, from S$62.7 million in the year-ago period.

The slight decline was due to an upward revision of prior years’ property tax for Hilton Singapore Orchard and Crowne Plaza Changi Airport, the Reit’s manager said on Wednesday (Oct 23).

Revenue for Q3 stood at S$74.8 million, down 1.3 per cent from S$75.8 million in the year before.

Han Khim Siew, chief executive officer of the Reit’s manager, said: “OUE Reit’s strategy of having a balanced portfolio continued to deliver resilient performance in Q3 2024. In the commercial segment, our Singapore offices secured high occupancy and strong rental reversion despite a softening of the near-term leasing market.

“In the hospitality segment… Crowne Plaza Changi Airport enjoyed robust performance following its successful asset enhancement programme last year.”

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The commercial segment recorded revenue of S$47 million, 1.1 per cent lower year on year due to lower contribution from Lippo Plaza. As at Sep 30, the Reit’s committed occupancy for its Singapore office properties stood at 95.4 per cent. It reported positive rental reversions of 10.8 per cent for office lease renewals.

Revenue from the hospitality segment fell 1.7 per cent to S$27.8 million, with the decrease attributed to the normalisation of tourist spending on accommodation compared to last year.

Revenue per available room (RevPar) increased 0.3 per cent year on year to S$296. In particular, Crowne Plaza Changi Airport’s RevPar grew by 30.3 per cent to S$259 within the same period.

Looking ahead, OUE Reit’s manager said while global economic uncertainties might impact leasing sentiment in the near term, delayed office completions and a more favourable interest rate environment are expected to support the office demand.

“The tourism recovery is expected to continue its growth trajectory with improved global flight connectivity, the implementation of visa-free travel between China and Singapore and new tourism offerings. However, cheaper tourist regional destinations, the absence of star-studded concerts, as well as weaker Mice pipeline will weigh on tourism performance,” the manager said.

Units of OUE Reit closed flat at S$0.30 on Wednesday, before the announcement.