OUE Commercial REIT's OUE Bayfront in Singapore. (Photo: REITsWeek)OUE Commercial REIT's OUE Bayfront in Singapore. (Photo: REITsWeek)

Singapore-listed office REIT, OUE Commercial REIT (SGX:TS0U), reported on 12 August that it has achieved gross revenue of SGD19.6 million for its 2Q 2015, an increase of 5.4% compared to the 18.6 million in the same period of 2014.

Correspondingly amount available for distribution for the period is at SGD12.8 million, an increase of 2.6% from 2Q 2014. “This was on the back of higher net property income from the portfolio, which saw a 2.8% year-on-year increase”, said the REIT in its official statement on the quarter’s results.

Distribution per unit (DPU) for the 2Q 2015 is 1.46 Singapore cents, an increase of 2.1% from the 1.43 Singapore cents paid in the corresponding period of 2014.

Despite falling occupancy at its properties overall, the REIT has described the quarter’s results as strong. “Whilst portfolio committed occupancy eased from a high of 98.6% as at 31 March 2015 to 95.3% as at 30 June 2015, we continued to see uplift in rental rates for both new and renewal leases in the portfolio”, said Tan Shu Lin, CEO of the REIT’s manager.

The REIT has indicated that it expects demand for office space in Singapore to continue from tenants in the information technology, e-commerce, insurance and energy sectors. “With no large office developments scheduled for completion this year, vacancy levels are expected to remain stable over the next six months”, it said.

The REIT also noted that overall Shanghai CBD Grade A office vacancy improved from 7.4% in 1Q 2015 to 6.2% in 2Q 2015 and pointed to its recent acquisition in Singapore, One Raffles Place, as a factor for better income figures in the quarters ahead.

“With about 10% to 15% overall estimated office vacancy at the office towers of One Raffles Place, there could be potential upside to OUE Commercial REIT’s rental income when some of this space is leased”, it said.

As at 30 June 2015, the REIT’s aggregate leverage was 37.9% down slightly from 38.6% in March 2015 as a portion of its RMB-denominated load was prepaid.

Units of OUE Commercial REIT fell 1.5% from the previous trading day to end at SGD0.67.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.