Resilient 1Q26 performance – OUE REIT (SGX:TS0U)'s revenue and NPI came in at S$70.5m and S$57.6m, up 6.7% y-o-y and 8.4% y-o-y, respectively, driven by resilient commercial performance and strong double-digit growth in the hospitality segment. Occupancy rate remains stable.
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Strong hospitality rebound; office holds firm
Commercial revenue rose 2.2% to S$43.6m and NPI lifted 3.0% y-o-y to S$33.3m, supported by Singapore office rental reversion of 6.0%. Mandarin Gallery delivered a 3.8% rental reversion, with occupancy at 95.6%.
Hospitality revenue surged 15.1% to S$26.8m and NPI jumped 16.8% y-o-y to S$24.3m, with RevPAR up 11.7% y-o-y, underpinned by improved MICE demand and contributions from Disney Cruise operations.
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Looking ahead, management remains constructive on office and hospitality fundamentals, supported by tight CBD supply and improving tourism demand. The ongoing Middle East tensions are not expected to disrupt operations, and OUE REIT has already locked in utility rates for five years (except for Crowne Plaza, which is on a fixed rate).
We expect mid-single-digit office rental reversion for FY26E. With hospitality demand improving y-o-y in 2H26, we forecast high-single-digit RevPAR growth on a full-year basis.
Balance sheet 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/.
