OUE Hospitality Trust (SGX:SK7) announced on 13 August that it has achieved revenue and net property income (NPI) of SGD29.6 million and SGD25.8 million respectively for its 2Q 2015 which ran from 1 April to 30 June.
“The higher revenue and NPI are attributable to the contribution from Crowne Plaza Changi Airport which was acquired on 30 January 2015”, said managers for the stapled security which comprises of OUE Hospitality REIT and OUE Hospitality Business Trust.
However the trust posted a distribution per stapled security (DPS) of 1.5 Singapore cents for its 2Q 2015, representing a decrease of 7.3% from the 1.64 Singapore cents achieved in the corresponding period of 2014.
“The hospitality and retail markets have remained challenging in 2Q 2015”, noted Christopher Williams, chairman of the manager for OUE Hospitality REIT. “Nonetheless, OUE Hospitality Trust will continue to employ active asset management and leasing strategies to optimise the performance of its portfolio”, he said adding that the team will also be looking out for acquisition opportunities from its sponsor and third parties.
Echoing the sentiment is Chong Kee Hiong, CEO of the REIT Manager. “The declining visitor arrival numbers into Singapore has impacted hospitality demand”, he said. However, OUE Hospitality Trust recorded higher hospitality revenue and NPI due to the additional master lease income from Crowne Plaza Changi Airport”, he added.
According to Chong income from its Changi Airport property more than offset the lower master lease income from Mandarin Orchard Singapore due to the decline in visitor arrivals.
The trust warned that conditions ahead may not be smooth sailing either. “With an uncertain global economic environment and a relatively strong Singapore dollar, the tourism industry may continue to face headwinds in 2015”, it said.
“Notwithstanding, the hospitality industry may benefit from the recent inscription of Singapore Botanic Gardens as a UNESCO World Heritage Site which may boost tourism in Singapore”, it added.
Units of OUE Hospitality Trust are last changed hands on the Singapore Exchange at SGD0.885.