OUE REIT (SGX:TS0U) provided a 3Q25 business update – Revenue and NPI for the quarter fell 5.8% and 5.6% y-o-y to S$70.5m and S$57.0m, respectively. However, on a like-for-like basis, after stripping out the income loss from the divestment of Lippo Plaza Shanghai in Dec 2024, revenue and NPI would have registered positive growth of 1.2% and 2% y-o-y, respectively.
Stable commercial segment performance.
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With slowing leasing momentum being offset by tight supply, management is expecting rental reversions to decelerate but remain positive in the low to mid-single digit range going into FY26, in part due to a higher base. Meanwhile, committed occupancy at Mandarin Gallery fell 1.6 ppt q-o-q to 97.4%, but rental reversions remained positive at 5.6% during the quarter as management remains focused on curating a diversified tenant mix at the asset.
Better than expected performance from the hospitality segment.
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We are cautiously optimistic that OUEREIT’s hospitality assets will turn in a firmer set of performance in 4Q25 given a more exciting calendar of events (such as the BLACKPINK concert).
Higher gearing but lower cost of debt.
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Above is an excerpt from a report by OCBC Investment Research. Clients of OCBC Securities may be the first to access the full PDF report @ https://www.iocbc.com/.
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