OUE Hospitality Trust's net income jumps 2.4% to $29.4m

Thanks to higher contribution from Crowne Plaza Changi Airport.

OUE Hospitality Trust, a stapled group comprising OUE Hospitality Real Estate Investment Trust and OUE Hospitality Business Trust, has achieved revenue and net property income (NPI) of $33.3 million and $29.4 million respectively for 3Q2016 which were 2.0% and 2.4% higher than last year's.

The higher revenue and NPI are attributable to the higher contribution from the enlarged Crowne Plaza Changi Airport (CPCA) as the 243-room extension to CPCA was acquired in August. The enlarged CPCA has a total of 563 rooms. OUE H-Trust’s distribution income (DI) and distribution per stapled security (DPS) for 3Q2016 were $22.3 million and 1.23 cents respectively.

OUE Hospitality REIT Management Pte. Ltd. CEO Chong Kee Hiong said the operating performance of both hospitality and retail segments has improved from the past quarter.

"The increase in master lease income from the 563-room enlarged CPCA has contributed positively to OUE H-Trust’s income. Compared to 3Q2015, OUE H-rust’s 3Q2016 revenue and NPI were respectively 2.0% and 2.4% higher,” Chong noted.

He furthered, "Though there has been some seasonal uplift in 3Q2016 compared to 2Q2016, the operating environment remains challenging with increasing hotel room supply through to 2017."

Looking forward, the group expects Singapore tourism to continue facing headwinds in the near term as consumers and corporates are likely to be conservative in their travel expenditures. More so, the group sees the retail scene to remain challenging. With this, the group claimed that they will continue to actively seek growth opportunities and yield acquisitions from its sponsor and third parties.

"Although OUE H-Trust’s retail segment income is impacted in 2016 by the lower rental contributions due to longer fit-out periods by the landlord, the strategy to sign strong tenants for longer lease periods will benefit OUE H-Trust through enhanced income stability in the long run," the group expressed.