OUE REIT (SGX:TS0U) reported FY25 DPU of S$2.23 cents, up +8.3% y-o-y. The strong growth was underpinned by a 17.6% y-o-y saving in finance expense and resilient rental reversion.
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Hospitality segment bottomed out
FY25 revenue and NPI came in at S$273.6m and S$219.6m, up 0.1% and +1.6% y-o-y, respectively, on a like-for-like basis, led by strong office rental reversion of 9.1% and retail of 12.4%. Share of results from JV rose 49.3% y-o-y to S$14.5m. Portfolio valuation eased 1.2% y-o-y, dragged by hospitality segment (Hilton: -3.5% y-o-y).
Mandarin Gallery suffered a 1.7ppt y-o-y drop in occupancy, leading to a 2.9% y-o-y valuation decline. Management is in active discussions with tenants for large leases due for renewal in FY26E (~19% of gross rental income), with retention demand indicated to be strong, although additional capex cannot be ruled out. We expect mid-single digit rental reversion for office and high-single digit for retail in FY26E.
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Balance sheet position strengthened
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Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
