SINGAPORE (Nov 7): The manager of OUE Hospitality Trust (OUE HT) has announced a 3Q18 distribution per stapled security (DPS) of 1.28 cents, down 5.9% from its 1.36 cent DPS a year ago.
The lower distributable income of $23.3 million, which is 5.4% down from the previous year’s distributable income of $24.7 million, was largely due to the absence of income support for Crowne Plaza Changi Airport (CPCA) hotel as it was fully drawn down as at 3Q17.
In all, gross revenue for OUE HT fell 2.2% to $33.2 million compared to $34 million a year ago, as both hospitality and retail segments posted lower revenue y-o-y.
Under the hospitality segment, master lease income from Mandarin Orchard Singapore (MOS) was lower than a year ago due to lower revenue per available room (RevPAR) on a decline in average room rates, as well as lower food and beverage (F&B) sales on lower banquet sales.
Master lease income from CPCA hotel remained largely unchanged from 3Q17 at minimum rent despite the progressive improvement of operating performance and higher RevPAR.
Meanwhile, retail revenue for the quarter declined by $0.1 million on lower effective rent per sq ft per month.
Due to the y-o-y fall in revenue over 3Q, property income (NPI) declined 1.4% to $29.1 million from $29.5 million previously, partially mitigated by lower property expenses.
OUE HT is a stapled group comprising OUE Hospitality Real Estate Investment Trust (OUE H-REIT) and OUE Hospitality Business Trust (OUE H-BT).
Stapled securityholders can expect to receive their distribution on Dec 6.
OUE HT’s manager remains positive on the hospitality industry outlook and intends to work closely with retail tenants to curate a differentiated mall offering in a challenging retail environment. Further, the manager says it will continue to focus on driving the performance of its assets while seeking suitable opportunities from its sponsor and third parties for the growth of OUE HT.
Commenting on the latest set of results, Isaac Chen, acting CEO of the REIT manager, says CPCA continues to demonstrate progressive improvement in its operating performance.
“While minimum rent was received as CPCA continued to ramp up its operations, we believe CPCA’s performance will maintain its positive trend,” says Chen.
“Following a complete refinancing in end-2017, the REIT continues to benefit from low interest rates locked in. A prudent capital management approach will be maintained in a rising interest rate environment with 71% of our debt on fixed rates,” he adds.
Units in OUE HT closed 0.74% higher at 68 cents on Wednesday.
