Lower gross revenue and higher net finance costs from borrowing hit the payouts at OUE Commercial Reit (OUE C-Reit) in the second quarter.
Distribution per unit dipped to 1.06 cents from 1.15 cents a year earlier.
Income available for distribution fell 7.5 per cent to $16.5 million in the three months to June 30 while gross revenue retreated 2.6 per cent to $43.1 million.
Net property income shrank 2.4 per cent to $33.9 million from the year-ago period.
The Reit proposed a distribution per unit for the first half of the year of 2.18 cents, down from 2.38 cents last year.
Books closure is on Aug 13 with distributions on Sept 5.
The Reit said it faced lower retail revenue in the second quarter from One Raffles Place shopping mall as a result of "transitional vacancy from the departure of an anchor tenant". This was offset partially by lower utilities cost.
AT A GLANCE
REVENUE: $43.1 million (-2.6%)
NET PROPERTY INCOME: $33.9 million (-2.4%)
DISTRIBUTION PER UNIT: 1.06 cents (-7.8%)
First-half income available for distribution slipped 1.6 per cent to $33.9 million from the previous year while gross revenue fell 2.1 per cent to $87.2 million. Net property income dipped 0.3 per cent to $69.2 million.
Its portfolio occupancy stood at 95.2 per cent as at June 30, down on the 96.4 per cent a year earlier due to lower retail occupancy at OUE Bayfront and Lippo Plaza.
All three of its properties - One Raffles Place, Lippo Plaza in Shanghai and OUE Bayfront - continue to achieve higher-than-market office occupancy, with levels between 95.1 and 97.6 per cent.
OUE Bayfront and Lippo Plaza also saw positive rental reversions in the quarter.
Meanwhile, the rental gap between expiring office rents and market continued to narrow at One Raffles Place, OUE C-Reit said in its investor presentation.
In China, healthy demand from the finance and technology sectors is expected to support occupancy as well as rental rates in Shanghai, despite a significant amount of new office space primed to enter the Shanghai market in the next two years before it eases in 2020.
OUE C-Reit units closed down 0.5 cent to 69 cents yesterday.