OUE REIT has reported a decrease in net property income (NPI) of 5.6% y-o-y for the 3QFY2025 ended Sept 30 of $57 million.
For the reporting period, revenue declined 5.8% y-o-y to $70.5 million.
OUE REIT says that this decrease is mainly due to the divestment of Lippo Plaza Shanghai in December 2024.
On a like-for-like basis however, revenue and NPI increased by 1.2% and 2.0% y-o-y respectively, underpinned by the resilient performance of the Singapore-centric portfolio.
For the REIT’s commercial segment, which includes office and retail, revenue and NPI increased by 4.2% and 3.8% respectively. A positive reversion of 9.3% for office lease renewals in 3QFY2025 was recorded, and average passing rent rose 0.5% q-o-q to $10.91 per square foot (psf) in Sept.
The REIT’s hospitality segment saw a revenue and NPI decline by 3.4% and 0.4% y-o-y for the 3QFY2025, because of the shift of Formula 1 Grand Prix to October year, which in previous years had boosted room demand and rates during the quarter.
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For 3QFY2025, the hospitality segment’s revenue per available room (RevPAR) decreased by 5.7% y-o-y to $279. Hilton Singapore Orchard’s RevPAR stood at $293 while Crowne Plaza Changi Airport’s RevPAR was $251.
As at Sept 30, the REIT’s weighted average cost of debt was further reduced by 10 basis points to 4.1% per annum while the aggregate leverage stood at 40.9%.
With 66.7% of the total debt hedged, the manager of the REIT says it is well-positioned to further capitalize on the current declining interest rate environment.
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The interest coverage ratio improved to 2.3x.
On Oct 8, OUE REIT issued $150 million 7-year investment-grade Green Notes due 2032 at 2.75%, the lowest coupon ever for OUE REIT’s bond issuances. Average term of debt is expected to extend to 3.3 years from 2.9 years as of Sept 30, on a pro forma basis following the notes issuance. Post issuance, OUE REIT has only 16.0% of total debt due in 2026.
Units in OUE REIT closed flat at 34.5 cents on Oct 23.
