OUE Reit’s Q3 NPI falls 5.6% to S$57 million on Shanghai asset sale

[SINGAPORE] OUE Real Estate Investment Trust (Reit) posted a 5.6 per cent decline in net property income (NPI) to S$57 million for the third quarter ended Sep 30, from S$60.3 million a year earlier.

Revenue similarly fell 5.8 per cent to S$70.5 million, from S$74.8 million previously. Both declines were mainly due to the divestment of Lippo Plaza Shanghai in December 2024, the Reit manager said in a business update on Thursday (Oct 23).

This was partly offset by a 19.7 per cent fall in finance costs to S$21.6 million, as interest rates eased.

OUE’s aggregate leverage stood at 40.9 per cent as at Sep 30, up slightly from 40.3 per cent as at Jun 30. Total debt rose to S$2.42 billion, from S$2.4 billion three months earlier. The weighted average cost of debt was 4.1 per cent per annum, compared with 4.2 per cent previously.

Assuming the net proceeds from the divestment of Lippo Plaza are fully utilised to repay loans, the aggregate leverage is expected to fall to 37.7 per cent as at Sep 30, the manager said.

It sold the 36-storey Grade A commercial building to an unrelated entity for 1.9 billion yuan (S$346.4 million) in December last year, and had said it expected to reap net proceeds of about S$318.2 million from the transaction.

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The commercial segment – comprising office and retail properties – accounted for 64.3 per cent of the Reit’s revenues, with the remainder coming from the hospitality segment.

The commercial segment recorded a 4.2 per cent rise in revenue to S$43.6 million, and a 3.8 per cent increase in NPI to S$32.5 million. “The stronger performance reflected higher average passing rents achieved across the commercial portfolio,” the manager said.

The hospitality segment “delivered a resilient performance” despite the shift of the Singapore Grand Prix 2025 to October, outside the reporting period, the manager added. In previous years, the annual race weekend had boosted room demand and rates.