OUE Commercial REIT's Crowne Plaza Changi Airport. (Photo: REITsWeek)OUE Commercial REIT's Crowne Plaza Changi Airport. (Photo: REITsWeek)

OUE Commercial REIT (OUE C-REIT) disclosed on 4 May that its revenue for 1Q 2023 has increased by 14.9% year-on-year to SGD68.4 million.

The rise was mainly driven by higher contributions from Hilton Singapore Orchard and Singapore commercial properties, said the REIT.

As a result of this, OUE Commercial REIT’s net property income (NPI) increased by 18.0% over the same period to SGD56.6 million.

The REIT has described its performance for the period as a strong one.

“In particular, our high-quality CBD Grade A office assets in Singapore continued to record high occupancy and positive rental reversion which provides resilient returns”, said Han Khim Siew, CEO of the REIT’s manager.

“The successful AEI completion and full opening of Hilton Singapore Orchard will be a growth engine for OUE C-REIT as Singapore's tourism sector and business travel continues on the recovery path”, he added.

“Looking ahead, the elevated interest rate environment continues to be challenging on interest costs for REITs including OUE C-REIT, and we expect higher interim interest expense to impact upcoming distributions in 2023”, Han warned.

The REIT is in advanced discussion with banks on the early refinancing of SGD263 million of borrowings due September 2023.

OUE Commercial REIT was last done on the SGX at SGD0.33, which presently implies a distribution yield of 6.42% according to data on the Singapore REITs table.

Related: OUE Commercial REIT outlines growth plans as return-to-office trend picks up

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.