Singapore office real estate investment trust OUE Commercial REIT (OUE C-REIT) (SGX:TS0U) has announced a distribution per unit (DPU) of 1.44 Singapore cents for its 4Q14, 5.1% higher than the 1.37 Singapore cents forecast for the period.

The quarter’s results brings OUE C-REIT’s FY2014 DPU to 5.27 cents, exceeding forecast by 4.4%. Correspondingly, the REIT’s gross revenue of SGD71.5 million in FY2014 represents a 3.6% increase over the forecast.

Manager of C-REIT has attributed its performance to better-than-expected occupancy and rental reversions achieved at both its properties, OUE Bayfront and Lippo Plaza. “Portfolio occupancy rose to 98% as at 31 December 2014 from 97.2% a quarter ago, as Lippo Plaza improved its occupancy from 94.4% to 96% while OUE Bayfront maintained full occupancy”, said Tan Shu Lin, CEO of OUE C-REIT’s manager.

As at 31 December 2014, OUE C-REIT’s aggregate leverage was 38.3%, lower than the 39.8% reported for the previous quarter.

However the average cost of debt of 2.81% per annum increased from 2.57% a quarter ago due to additional interest rate swaps entered into by the manager to further hedge OUE C-REIT’s interest rate exposure. As a result, 73.6% of OUE C-REIT’s interest rate exposure is fixed for the next 3.19 years as at 31 December 2014. With an average term to maturity for its debt of 2.95 years, OUE C-REIT has no refinancing requirement until 2017.

OUE C-REIT remains positive on its outlook for the quarters ahead, including in Singapore where demand for office space remains strong. “As new supply in the CBD continues to be limited over the next 18 months, rental growth is expected to remain positive in 2015. This is expected to benefit lease renewals at OUE Bayfront”, said OUE C-REIT in a release announcing the results.

Units of OUE C-REIT last changed hands on the Singapore Exchange at SGD0.82.