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

Singapore-listed office landlord, OUE Commercial REIT (SGX:TS0U), has announced an amount available for distribution of SGD13.1 million for its 3Q 2015,

The figure represents an increase of 7.1% year-on-year and exceeding forecast by 10.0%. Gross revenue and net property income (NPI) for the quarter saw an increase of 5.7% and 4.7% year-on-year to SGD20.6 million and SGD15.5 million respectively.

However distribution per unit (DPU) of 1.02 Singapore cents represents a fall of 27.1% as compared to the 1.40 Singapore cents paid for 3Q 2014. DPU for this quarter has since been restated to 0.97 Singapore cents to include 393 million new units issued in pursuant to a private placement exercise in August 2015 - at which the DPU for 3Q 2015 will represent an increase of 5.2%.

OUE Commercial REIT has attributed the increase in amount available for distribution to improved occupancy figures. “Portfolio committed occupancy increased to 97.1% as at 30 September 2015 from 95.3% as at 30 June 2015 due to improved office occupancy at both properties”, said Tan Shu Lin, CEO of the REIT’s manager.

“Notably, Lippo Plaza achieved a 100% committed office occupancy, while committed office occupancy at OUE Bayfront rose to 97.4%”, said Tan. “Office rental reversions continued to be positive during the quarter, with OUE Bayfront recording 22.3% uplift in renewed and reviewed office rents while Lippo Plaza saw a 7.7% increase”, she added.

As at 30 September 2015, OUE Commercial REIT’s aggregate leverage was 33.9% with an average cost of debt of 3.16% per annum. Portfolio weighted average lease expiry (WALE) was 2.7 years by net lettable area and 3.0 years by gross rental income.

OUE Commercial REIT has however warned that vacancy issues may loom in the quarters ahead for the Singapore office market. “While the current low office vacancy is likely to continue in the near-term, the completion of new office developments from the second half of 2016 is expected to impact vacancy and rents”, it said

Units of OUE Commercial REIT last changed hands on the Singapore Exchange at SGD0.685.

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.