SINGAPORE (Aug 7): The manager of OUE Commercial Real Estate Investment Trust (OUE C-REIT) has announced distribution per unit (DPU) of 1.68 cents for the 1H19 ended June, some 22.9% lower than DPU of 2.18 cents a year ago.
The decline was due to an enlarged unit base, as a result of some 1.29 billion new units issued on Oct 30, 2018, pursuant to the rights issue.
OUE C-REIT pays out its distribution on a semi-annual basis. The DPU of 1.68 cents for 1H19 is expected to be paid on Sept 12.
Amount available for distribution rose 43.2% to $48.6 million in 1H19, from $33.9 million a year ago.
1H19 revenue grew 23.0% to $107.2 million, from $87.2 million a year ago
This was due mainly to the inclusion of income from OUE Downtown Office, which was acquired in November 2018 and one-off income from OUE Bayfront and One Raffles Place in 1Q19.
Other income for 1H19 increased by $7.2 million with the inclusion of income support from the sponsor group, in relation to OUE Downtown Office.
Property operating expenses increased by 27.6% to $22.9 million during the quarter, from $17.9 million a year ago.
Consequently, 1H19 net property income rose 21.8% to $84.3 million, from $69.2 million a year ago.
Committed portfolio occupancy was stable at 94.5% as at June 30, 2019.
As at end June, cash and cash equivalents stood at $38.7 million.
OUE C-REIT has an aggregate leverage ratio of 39.3% as at end June, with no significant refinancing requirements until 2020.
“In 2Q19, the operational performance of OUE C-REIT remained positive, with stable committed occupancy and higher average passing office rents across OUE C-REIT’s portfolio of properties,” says Tan Shu Lin, CEO of the manager.
“Although rental growth in the Singapore CBD Grade A office market has moderated, continued leasing momentum within OUE C-REIT’s properties led to higher rents being achieved in 2Q19 compared to the previous quarter, while maintaining stable committed office occupancy,” she adds.
The manager in April proposed the merger of OUE C-REIT with OUE Hospitality Trust by way of a trust scheme of arrangement. An EGM will be convened next week, on Aug 14.
The manager says the enlarged scale of the combined portfolio – with total assets of approximately $6.9 billion – will enhance the enlarged REIT’s visibility.
It adds that the larger market capitalisation and free float could drive higher trading liquidity, which could potentially lead to a positive re-rating.
Units in OUE C-REIT closed flat at 53 cents on Wednesday before the results announcement.
