SINGAPORE (Aug 2): OUE Commercial REIT (OUE C-REIT) posted a 15.4% drop in 2Q17 ended June DPU of 1.15 cents from 2Q16 DPU of 1.36 cents, due to the enlarged number of units after the March private placement.
OUE Commercial REIT Management says OUE C-REIT’s property portfolio achieved stronger operational performance in 2Q17. Revenue however was 3.2% lower y-o-y at $44.2 million due to lower one-off income recognised during the quarter while net profit income came in 1.3% lower at $34.8 million. With lower operating expenses and lower borrowings costs, 2Q17 amount available for distribution was $17.8 million, 0.6% higher y-o-y.
As OUE C-REIT pays out its distribution on a semi-annual basis, 1H17 DPU 2.38 cents, 11.2% lower than the 1H16 DPU of 2.68 cents.
Despite the decline in market occupancy rate and increased leasing competition posed by new office developments, OUE Commercial REIT Management says committed office occupancy achieved at all three properties in OUE C-REIT’s portfolio outperformed their respective office markets, with overall portfolio committed occupancy increasing to 96.4% as at the end of 2Q17 from 95.8% a quarter ago. Further, committed rents for new and renewed office leases in 2Q17 were in line with or higher than current market.
OUE Bayfront’s committed office occupancy edged down slightly to 98.9% as at June 30 from 100% a quarter ago, but continued to outperform Singapore’s core CBD office occupancy of 94.1% for 2Q17.
Office rents achieved in 2Q17 for new and renewed leases ranged from $10.85 psf per month to $14.00 psf per month, compared to Grade A CBD core office rents of $8.95 psf per month for the same period.
The committed office occupancy rate at One Raffles Place climbed for the sixth consecutive quarter to 95.0% as at June 30, improving 3.2 ppt y-o-y. Office rents achieved in 2Q17 for new and renewed leases ranged from $8.00 psf per month to $11.80 psf per month.
Lippo Plaza achieved committed office occupancy of 100% as at June 30, rising 4.2 ppt from 95.8% as at 31 March 2017.
In its outlook, CBD Grade A office rents in Singapore stabilised at $8.95 psf per month in 2Q17, after eight straight quarters of decline, according to CBRE.
For the private placement which was completed on March, an advance distribution of 1 cent per unit for the period from Jan 1 to March 16 was paid on June 6. The balance distribution from March 17 to June 30 of 1.38 cents per unit will be paid on Sept 5.
Units of OUE Commercial REIT closed at 73 cents on Wednesday.
