OUE Reit posts 11.9% fall in Q1 revenue to S$66 million

[SINGAPORE] OUE Reit’s revenue fell 11.9 per cent to S$66 million for its first quarter ended Mar 31, from S$74.9 million in the year-ago quarter.

This was mainly due to the divestment of Lippo Plaza in Shanghai, China, as well as lower contributions from the hospitality segment due to a weaker trading environment compared to the previous year, the manager said in a business update on Thursday (Apr 24).

Net property income (NPI) fell 12.1 per cent on the year to S$53.2 million for the quarter, from S$60.5 million.

By segment, the commercial (office and retail) segment’s revenue and NPI increased 2.2 per cent to S$42.7 million and S$32.3 million, respectively, excluding the impact of the Shanghai divestment.

This was underpinned by high-quality assets located in prime areas.

For the hospitality segment, revenue declined 13.3 per cent to S$23.3 million, and NPI fell 12.5 per cent to S$20.8 million, against the high-base effect in Q1 2024.

Meanwhile, the manager said proactive capital management in 2024 has reduced the weighted average cost of debt to 4.2 per cent per annum as at Mar 31, 2025, from 4.7 per cent per annum as at Dec 31, 2024.

Financing costs also fell 11.3 per cent on year to S$22.6 million in Q1 2025.

Looking ahead, the manager said the outlook for the year remains “cautiously optimistic after an uninspiring Q1 2025”, with an improved concert line-up.

Yet, macroeconomic uncertainties and competition from more affordable regional destinations will continue to weigh on tourists’ preferences and travel appetites.

The manager expects overall retail rents to recover to pre-pandemic levels by 2025, supported by new supply that falls below the historical average.

Han Khim Siew, chief executive of the manager, added that the real estate investment trust’s fundamentals remain strong with healthy positive reversionary rents in its office segment.

“Singapore’s solid economic fundamentals and position as a global business hub will continue to underscore the strength of our portfolio, enabling OUE Reit to deliver stable long-term performance with sustained growth potential,” he said.

Units of OUE Reit closed flat at S$0.275 on Thursday, before the results were released.