- OUE REIT (SGX:TS0U) delivered DPU of 0.98 cents (+5.4% y-o-y) in 1H25, largely in line with DBS and tracking consensus full-year DPU estimates.
- Core DPU, excluding the S$2.5mil capital distribution released in 1H24 from the 50% divestment of OUE Bayfront, would have been up 11.4% y-o-y. This growth was achieved as interest savings more than offset the absence of contributions from Lippo Plaza Shanghai. 1H25 revenue and net property income (NPI) fell 10.6% and 10.1% y-o-y to S$131.1mil and S$105.3mil, respectively.
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Office portfolio achieved a committed occupancy of 95.5%
- The office portfolio achieved a committed occupancy of 95.5% (- 0.8ppt q-o-q) as of 30 June 2025 and 9.1% rental reversion in 2Q25. Mandarin Gallery retail occupancy moderated slightly from a record high in the last quarter to 99.0% (-0.5ppt q-o-q) as of 30 June 2025, with 34.3% rental reversion in 2Q25.
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Financing costs fell 17.3% y-o-y
- Financing costs fell 17.3% y-o-y as cost of debt declined to 4.2% (- 50bps y-o-y, stable q-o-q). Aggregate leverage was down slightly to 40.3% (-30bps q-o-q) and is expected to decline to 37.2% assuming the net proceeds from the divestment of Lippo Plaza are fully utilised to repay loans.
Our view:
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