OUE Commercial Reit (real estate investment trust) reported a strong performance for its properties in the first quarter.
Distribution per unit slipped 6.8 per cent to 1.23 cents for the three months to March 31, compared with the same period a year earlier.
The amount available for distribution dipped 2.3 per cent to $16.6 million, owing to prudent measures regarding China-sourced profits from Lippo Plaza in Shanghai.
Quarterly net property income grew 4.2 per cent to $34.6 million, in line with revenue, which grew 4.4 per cent to $44.8 million.
Property operating expenses grew 5.3 per cent in line with improved revenue, and tax expenses rose 13.7 per cent to $4.4 million, in line with higher taxable profits at Lippo Plaza and One Raffles Place.
Ms Tan Shu Lin, the manager's chief executive, said: "Steady revenue and net property income growth were driven by higher occupancy at OUE Bayfront and One Raffles Place, as well as continued rental growth at Lippo Plaza."
She added that committed rents for new and renewed leases in the quarter were in line with or higher than current market rates.
"However, some renewal leases in the Singapore properties were committed at below expiring rents, said Ms Tan.
OUE Bayfront had a committed occupancy of 100 per cent as of March 31 , for instance. Its offices continued to command a premium over the market - committed rents for new and renewed office leases in the quarter ranged from $10 per sq ft (psf) per month to $11.70 psf per month, compared with Grade A Central Business District (CBD) core office rents of $8.95 psf per month.
AT A GLANCE
DISTRIBUTION PER UNIT: 1.23 cents (-6.8%)
REVENUE: $44.8 million (+4.4%)
DISTRIBUTABLE INCOME: $16.6 million (-2.3%)
The Reit manager noted that the average passing office rent for OUE Bayfront was $11.67 psf per month for March this year.
One Raffles Place also did well, putting in a fifth straight quarter of increase in its office occupancy rate. For instance, committed office occupancy there improved 2.4 percentage points year-on-year to 93 per cent as of March 31.
Office rents in the quarter for new and renewed leases ranged from $8 psf per month to $10.20 psf per month, while its average passing office rent was stable at $10.21 psf per month for March.
And Lippo Plaza's committed office occupancy was significantly above the overall Shanghai CBD Grade A occupancy of 87.6 per cent, at 95.8 per cent as of March 31.
It recorded a range of committed rents for new and renewed office leases from eight yuan (S$1.60) per sq m per day to 11.30 yuan per sq m per day, and average passing office rent registered a 3.5 per cent year-on-year increase to 9.88 yuan per sq m per day for March.
Ms Tan said: "In view of the headwinds faced in both the office markets of Singapore and Shanghai, the manager will continue... to proactively attract and retain tenants to ensure stability of occupancy rates... (and) also focus on active cost management measures so as to mitigate any impact of lower committed rents on rental income."
The units closed flat at 70.5 cents yesterday.