SINGAPORE (Aug 6): The manager of OUE Hospitality Trust (OUE HT) has declared a distribution per stapled security (DPSS) of 1.06 cents in 2Q19, a 9.4% drop from the 1.17 DPSS declared in 2Q18 the preceding year.
OUE HT is a stapled group comprising OUE Hospitality REIT and OUE Hospitality Business Trust.
Gross revenue for the quarter fell 4.4% to $29.4 million in 2Q19 from $30.7 million in 2Q18, on the back of lower revenue contributions from hospitality and retail segments.
Segmentally, hospitality revenue fell 6% to $21 million due to lower master lease income from Mandarin Orchard Singapore (MOS), while retail revenue was marginally lower by 0.3% due to lower monthly effective rent psf.
Property expenses for 2Q19 fell 4.1% to $4.1 million due primarily to lower operating lease expenses as a result of finance expense recognition.
Consequently, net property income for the quarter fell 4.5% to $25.3 million due to lower gross revenue recorded, partially mitigated by lower property expenses from the hospitality segment.
Master lease income from MOS slid 8% to $15.3 million as it recorded a lower RevPAR of $196 due to lower average room rates and lower demand from the transient and corporate segments, as well as lower food and beverage sales.
However, master lease income from Crowne Plaza Changi Airport (CPCA) remained the same while RevPAR increased to $188. As the master lease income was below the minimum rent, minimum rent was received for the period.
Noting a current trading environment impacted by global economic uncertainty and the absence of large-scale biennial events in 2019, the manager of OUE HT says CPCA is well-positioed to benefit from Changi Airport’s strategy of continued upgrades to manage increased capacity in the longer term.
Units in OUE HT closed at 1 cent lower at 72 cents on Tuesday.
