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.
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