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OUE REIT reports $60.5 mil 1QFY2024 net property income, up 6.9% y-o-y

Bryan Wu
Bryan Wu • 2 min read
OUE REIT reports $60.5 mil 1QFY2024 net property income, up 6.9% y-o-y
The REIT's hospitality segment was able to capitalise on the strong concerts and MICE pipelines in the first quarter of 2024. Photo: OUE REIT
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OUE REIT TS0U -

has reported a 6.9% y-o-y growth in net property income (NPI) to $60.5 million for its 1QFY2023 ended March 31 as the REIT benefited from Singapore’s busy event schedule.

For the quarter, revenue increased 9.5% y-o-y to $74.9 million as Hilton Singapore Orchard increased its contribution and the REIT’s commercial properties posted resilient operating performance.

CEO of the manager Han Khim Siew says the timely asset enhancements at Hilton Singapore Orchard and Crowne Plaza Changi Airport enabled the REIT to capitalise on the strong concerts and MICE pipelines in the first quarter of 2024. 

The REIT’s hospitality segment revenue for 1QFY2024 was 22.7% higher y-o-y at $26.9 million, while NPI was 15.9% higher y-o-y at $23.8 million. Revenue per available room (RevPAR) rose 23.3% y-o-y to $280. 

In particular, Hilton Singapore Orchard significantly surged by 32.3% y-o-y to $308 for the quarter on the back of higher occupancy. Meanwhile, despite the enlarged room inventory of 575 rooms, Crowne Plaza Changi Airport’s RevPAR also rose by 5.1% y-o-y, reaching $227.

For 1QFY2024, the REIT’s office and retail commercial segment recorded a higher revenue of $48.0 million and NPI of $36.7 million, representing an increase of 3.3% and 1.7% y-o-y, respectively.

See also: Cordlife posts net loss of $11.57 mil for 1QFY2024 due to refund fulfilment

Han says that as part of the REIT’s proactive capital management to smoothen its debt maturity profile, it successfully obtained an unsecured sustainability-linked loan (SLL) of $600 million in April for the early refinancing of existing secured borrowings due in 2025 and general corporate purposes. 

Backed by strong support from a total of 12 banks, the SLL was two times oversubscribed and was subsequently upsized from the initial loan amount of $540 million to $600 million including the greenshoe. 

Post refinancing, OUE LJ3 REIT has no further refinancing requirements until the second half of 2025 when only 25% of its total debt is due. 

See also: Changi Airport Group reports FY2024 earnings of $431 mil, 13.1 times higher y-o-y

As at March 31, OUE REIT’s aggregate leverage stood at 38.8%. The REIT’s weighted average cost of debt remained stable at 4.5 per annum, with a weighted average term of debt of 2.2.

“Looking ahead, higher financing costs arising from the elevated interest rate environment is expected to impact the upcoming distribution. To mitigate the impact, the manager remains steadfast in optimising our asset performance while managing capital prudently,” says Han.

Units in OUE REIT closed unchanged at 27 cents on April 24.

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