Singapore-listed OUE Hospitality Trust announced on 1 August that it has recorded a distribution per stapled security (DPS) of 0.92 Singapore cents for its 2Q 2016, a fall of 39.5% compared to the 1.52 cents paid for 2Q 2015.

“Excluding the effects from the rights issue in April 2016, the DPS would have been 1.23 cents”, said the trust. This would have registered as a fall of 19.1% in the DPS.

Gross revenue and net property income for the quarter slipped by 9.2% and 10.2% year-on-year to SGD26.9 million to SGD23.2 million respectively.

“Global economic uncertainty has dampened corporate travel and a continued increase in the supply of new hotel rooms in Singapore has created a highly competitive market environment for business from all segments resulting in lower revenue per available room for both Mandarin Orchard Singapore and Crowne Plaza Changi Airport”, said Chong Kee Hiong, CEO of the REIT component’s manager.

OUE Hospitality Trust also added that the retail climate in Singapore remains challenging.

“Retail revenue for 2Q2016 was SGD1.4 million lower than 2Q 2015 mainly due to lower average occupancy rate at 79.1% and landlord fit out periods for incoming tenants, including Michael Kors and Victoria’s Secret”, added Chong.

The trust’s gearing for the period was at 37.3% with an average weighted debt maturity of 2.8 years.

The trust has warned that it expects the quarters ahead to remain challenging given the subdued local and global economy, coupled with the increase in rooms supply.

“We will continue to actively seek growth opportunities and yield accretive acquisitions from our sponsor and third parties”, said the trust on some of its plans for the quarters ahead.

Units of OUE Hospitality Trust finished the trading day about 2.7% lower from its previous close on the Singapore Exchange to end at SGD0.71.