OUE REIT’s (SGX:TS0U
) net property income (NPI) rose by 8.4% y-o-y to $57.6 million in 1QFY2026 ended March 31. Meanwhile, revenue increased by 6.7% y-o-y to $70.5 million in the same period.
The higher revenue and NPI were mainly driven by strong y-o-y growth in the hospitality segment, which saw double-digit increase in the quarter, coupled with resilient operating performance from the commercial portfolio.
Share of results of joint venture and associate jumped by 57.2% y-o-y, mainly driven by higher contribution from OUE Bayfront arising from significant interest cost savings following its refinancing completed last August and the acquisition of 180 George Street on March 16.
The commercial segment, which comprises of both office and retail, achieved higher revenue and NPI of $43.6 million (+2.2% y-o-y) and S$33.3 million (+3.0% y-o-y) respectively.
The higher numbers were derived from the higher average passing rents from consecutive quarters of positive rent reversion across the commercial portfolio.
As at March 31, OUE REIT’s Singapore office portfolio committed occupancy stood at 95.2% and recorded a positive rental reversion of 6.0% for office lease renewals, while average passing rent rose by 0.2% q-o-q to $11.00 per square foot (psf) per month.
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For the hospitality segment, revenue and NPI saw a faster growth rate of 15.1% and 16.8% y-o-y to $26.8 million and $24.3 million respectively, driven by improved MICE pipeline which includes the return of the biennial Singapore Airshow and the maiden voyage of Disney Cruise.
OUE REIT’s hospitality segment’s revenue per available room (RevPAR) was up by 11.7% y-o-y to $277. Hilton Singapore Orchard’s RevPAR in 1QFY2026 increased by 11.2% y-o-y to S$277 on higher occupancy rate driven by increased transient demand and stable corporate bookings.
Crowne Plaza Changi Airport recorded RevPAR of $276 in 1QFY2026, translating to an 11.7% y-o-y growth.
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On the capital management front, OUE REIT’s weighted average cost of debt improved by 20 basis points q-o-q to 3.7% per annum, driven by lower interest rate environment.
Weighted average term of debt stood at 3.0 years as at March 31 and aggregate leverage was at 41.5%, following the acquisition of a 19.9% interest in 180 George Street and drawdowns for payment of distributions to Unitholders in 1QFY2026.
Interest coverage ratio improved slightly to 2.6 times as at March 31, compared against the figure of 2.4 times as at December 31.
“Looking ahead, our portfolio fundamentals remain resilient, underpinned by the continued attractiveness of Singapore and Sydney as safe haven markets amid heightened global uncertainty. Building on these strengths, we will continue to advance our Phase 3 Value Creation Journey with a focus on disciplined capital allocation, active asset management and long-term value creation for Unitholders,” says Han Khim Siew, CEO of the manager.
Units in OUE REIT closed 0.5 cents higher, or 1.37% up at 37 cents on April 21.
