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OUE Hospitality Trust’s (OUE H-Trust) distributable income rose 12.7 percent year-on-year to $92.9 million in 2017 or its highest level since listing, revealed an SGX filing on Tuesday (30 January).
At the same time, its net property income (NPI) and revenue increased by five percent and seven percent respectively to $112.7 million and $131.1 million. Its distribution per stapled security (DPS) also edged up from 4.61 cents to 5.14 cents.
“OUE H-Trust has achieved an 11.5 percent increase in DPS for 2017 compared with 2016 on the back of higher income from both the hospitality and retail segments,” said Lee Yi Shyan, Chairman of OUE Hospitality REIT Management Pte Ltd, the REIT manager.
“The hospitality segment was boosted by higher contribution from the enlarged Crowne Plaza Changi Airport (CPCA) and improved operating performance by Mandarin Orchard Singapore (MOS). Mandarin Gallery has also contributed to the better performance as it had achieved higher average occupancy of 95.5 percent in 2017 as compared to 86.3 percent in the previous year.”
But in Q4 2017, OUE H-Trust’s distributable income declined from $24 million in the same period a year ago to $23 million, while DPS fell from 1.36 cents to 1.27 cents due to the absence of income support for CPCA and higher interest expense, which was partially offset by higher income received from hospitality and retail segments.
Nevertheless, MOS’ revenue per available room (RevPAR) rose for the third straight quarter in Q4 2017 on an annual basis, noted the REIT manager’s CEO Chong Kee Hiong.
“RevPAR recorded was $225 supported by higher average room rates compared to RevPAR of $220 in Q4 2016. The hotel’s banquet sales and food and beverage outlets have also performed better. As a result, master lease income for MOS was $0.8 million higher. This has partially mitigated the absence of $1.6 million of income support from CPCA in Q4 2017.”
Furthermore, Mandarin Gallery’s average occupancy rate climbed from 94.1 percent in Q4 2016 to 96.9 percent in the quarter under review. However, the mall’s revenue dipped slightly by 1.7 percent in light of lower effective monthly rent of $22 psf compared to $23.6 psf in the corresponding period in 2016.
OUE H-Trust is a stapled group consisting of OUE Hospitality Business Trust (OUE H-BT) and OUE Hospitality Real Estate Investment Trust (OUE H-REIT).
While the former is dormant, OUE H-REIT owns three properties with a combined value of $2.2 billion as of 31 December 2017. These are the high-end retail mall Mandarin Gallery, the 563-room Crowne Plaza Changi Airport and the 1,077-room Mandarin Orchard Singapore.
This article was edited by Keshia Faculin.
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