OUE Hospitality Trust NPI dipped 0.5% to $26.5m in Q2

Increased visitor arrivals could benefit Crowne Plaza due to the upcoming bigger Seletar terminal.

OUE Hospitality Trust’s (OUE H-Trust) revenue slipped 1.4%YoY to $30.7m in Q2 2018, an announcement revealed. Its profit dipped 0.5% YoY to $26.5m whilst its distributable income fell 2.5% to $21.3m

Despite this, OUE H-Trust acting CEO Chen Yi-Chung Isaac noted that the hotel portfolio’s revenue per available room (RevPAR) increased 2.6% YoY to $195. He also mentioned that Crowne Plaza Changi Airport’s (CPCA) RevPAR jumped 10.5% YoY to $168.

Chen also said that CPCA saw minimum rents as it underwent ramping up of its operations whilst Mandarin Orchard Singapore (MOS) recorded lower RevPAR YoY amidst weaker demand from the wholesale segment.

“Food and beverage sales in MOS recorded a decline in banquet sales, partially mitigated by higher revenue achieved in all MOS’ food and beverage outlets,” the acting CEO added.

In addition, Chen mentioned that Mandarin Gallery’s average occupancy increased to 97.4% in Q2 from 96.0% in Q1.

“However, revenue and NPI from the retail segment were slightly lower due to a lower effective rent of $22.3 psf/mth in 2Q2018 compared to $23.8 psf/mth in 2Q2017 as a result of negative rental reversion in the preceding quarters,” Chen explained.

The firm believes that CPCA could potentially benefit from the increase in visitor arrivals as the enlarged Seletar Airport passenger terminal Jewel set to open by late 2018 will be linked to via pedestrian bridge.

“On the supply front, future supply is expected to taper off with much of the planned hotel room inventory having entered the market in the past two years,” the firm commented. “Market occupancy is expected to strengthen in light of healthy tourist arrivals.”