- Softer quarter on divestment and hospitality pullback – OUE REIT reported a y-o-y decline in revenue and NPI of 11.9% and 12.1% respectively for 1Q25.
- The lower figures reflect the absence of contributions from Lippo Plaza, following its divestment in December 2024, as well as a softer hospitality performance amid a more subdued trading environment compared to the previous year.
Strategic divestment.
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Proactive debt management.
- Financing costs declined 11.3% y-o-y to S$22.6mil in 1Q25, supported by active refinancing and interest rate hedging. The weighted average cost of debt fell to 4.2% per annum, down from 4.7% in the prior quarter.
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Resilient leasing momentum supported by prime CBD exposure.
- OUE REIT's office portfolio continued to demonstrate resilience in 1Q25, achieving a high committed occupancy of 96.3% as of 31 March 2025 and delivering a positive rental reversion of 9.9% for lease renewals during the quarter.
- The average passing rent rose 0.5% q-o-q to S$10.77 per square foot per month, reflecting ongoing demand for well-located Grade A assets in Singapore’s Core CBD. Notably, this comes against a backdrop where Singapore’s overall central region office rents rose 0.3% q-o-q in 1Q25 after two consecutive quarters of decline, according to the Urban Redevelopment Authority (URA).
- Industry experts from Knight Frank and Colliers highlighted that despite broader economic uncertainty, occupiers are favouring lease renewals over relocations, supporting occupancy stability.
- Given the tightening supply pipeline within the CBD and Singapore's safe-haven appeal, OUE REIT's office portfolio remains well-positioned to deliver stable performance in FY25.
Hospitality recovery normalising from high base.
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