OUE Commercial REIT’s Q1 earnings soar 112% to $33.26

One Raffles Place posted strong results.

Thanks to robust contribution from One Raffles Place, OUE Commercial REIT’s (OUECT) net property income for the first quarter of 2016 skyrocketed 112% YoY to around $33.26m.

According to a report by OCBC, OUECT also enjoyed stronger performance from OUE Bayfront, as well as decreased maintenance expenses at Lippo Plaza.

This was partly offset, however, by higher property operating costs and property taxes.

OCBC further notes that finance costs over the quarter also picked up QoQ from $4.7m to $13.8m, given an increased amount of loans outstanding.

In terms of the topline, gross revenue jumped YoY from $20.4m in 1Q15 to $42.9 in the quarter given the impact from One Raffles Place and OUE Bayfront.

Meanwhile, OUECT’s overall portfolio occupancy inched up from 94.3% as at end 4Q15 to 94.8% at the latest quarter. OCBC also expects positive rental reversion of 4.9%, 3.0% and 5.3% at OUE Bayfront, One Raffles Place and Lippo Plaza, respectively.

In preparation for the flood of office supply in the second half of 2016, OUECT’s management has been actively managing the lease expiry profile of its portfolio. As at end Q1, 9.1% of the trust’s gross rental income is on back of renewal in 2016.

OCBC emphasizes that all expiring leases in 2016 for OUE Bayfront has been renewed and more than 60% of the asset’s gross rental income is up for renewal only in 2019 and onward.