SINGAPORE (Aug 2): The manager of OUE Commercial Real Estate Investment Trust (OUE C-REIT) reported 2Q18 DPU dropped 7.8% to 1.06 cents, compared to 1.15 cents in 2Q17.
This brings DPU for 1H18 to 2.18 cents, 8.4% lower than 2.38 cents in 1H17.
Revenue for the quarter came in at $43.1 million, 2.6% lower than $44.2 million a year ago.
As property operating expenses dropped 3.4% y-o-y to $9.13 million, net property income came in 2.4% lower at $33.9 million from $34.8 million last year.
This was due mainly to lower retail revenue from One Raffles Place Shopping Mall as a result of transitional vacancy from the departure of an anchor tenant. This lower retail revenue in 2Q18 was partially offset by lower utilities cost recorded in the current reporting period.
The amount available for distribution to unitholders for 2Q18 dropped by 7.5% to $16.5 million, as compared to $17.8 million in the previous year.
This was mainly attributable to higher interest expenses in 2Q18 as a result of higher borrowings, partially offset by higher drawdown of income support and lower distribution to convertible perpetual preferred unit (CPPU) holder.
Tan Shu Lin, CEO of the REIT’s manager says, “The manager will continue to focus its efforts on proactive asset management, as well as maintain a prudent and disciplined stance towards to capital management, so as to deliver stable and sustainable returns for Unitholders.”
Tan also believes that the REIT is well-positioned to benefit from the rising Singapore office market, as more than 50% of OUE Bayfront’s gross rental income will be due for renewal over the next two years.
Units in OUE C-REIT closed at 69 cents on Thursday.
