OUE REIT has reported a DPU of 1.25 cents for its 2HFY2025, an increase of 10.6% y-o-y, thanks to better operating performance of its portfolio, plus lower financing costs. This brings its full-year distribution to 2.23 cents, up 8.3% over the preceding FY2024.
For the half year ended Dec 2025, net property income dropped 2.3% to $114.2 million and revenue was down 4.2% to $142.5 million. The drop was because of the absence of contributions from Lippo Plaza Shanghai, which has been sold.
On a like-for-like basis, which excluded Lippo Plaza Shanghai, the REIT's net property income and revenue were up 5.2% and 2.9% y-o-y respectively, led by its stronger Singapore commercial portfolio and improved performance in the hospitality segment in 2HFY2025.
As of Dec 31, OUE REIT's properties were valued at $5,082.0 million, down 1.2% y-o-y, equivalent to NAV per unit of 56 cents.
The slight drop is due to lower valuations of the hotel and retail assets, but somewhat offset by higher valuations of the office properties.
“Amid heightened macroeconomic uncertainty and geopolitical tensions, our purposefully constructed Singapore-centric, high-quality, prime-located portfolio delivered resilient income performance," says Han Khim Siew, CEO of the manager.
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"It was complemented by our successful divestment of Lippo Plaza Shanghai in 2024, which mitigated exposure to the continued weakness in the Shanghai office market.
"Our proactive capital management over the past three years further positioned OUE REIT to benefit from the faster-than-expected decline in Singapore Overnight Rate Average supporting our robust DPU growth," he adds.
Going forward, Han aims to "actively enhance" the REIT's portfolio through "capital recycling and selective deployment", including "targeted opportunities" in Sydney.
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"Sydney’s core prime business district currently presents an attractive combination of growth potential, and a favourable risk-reward profile," he says.
On Jan 8, OUE REIT confirms media reports out of Australia that it is in talks to buy a 20% stake in Salesforce Tower in Sydney worth A$360 million. The potential seller is Mitsubishi Estate Asia.
With the sale of Lippo Plaza Shanghai in 2024, OUE REIT's portfolio had become purely Singapore-based. The acquisition of the stake in Salesforce Tower will change that.
OUE REIT units closed at 37 cents on Jan 26, down 1.35% for the day but up 21.67% in the past year.
