OUE REIT reported amount available for distribution of S$69.84 million for the six months ended Jun 30 2026, up 28.6% year-on-year, as stronger hotel trading and a double-digit drop in interest expenses offset softer contributions from its Singapore offices and mall.

First-half revenue rose 3.8% YoY to S$136.05 million, while net property income increased 4.8% to S$110.35 million. The real estate investment trust declared a distribution per unit (DPU) of 1.26 Singapore cents, 28.6% higher than a year earlier. The distribution will be paid on 3 Sept 2026 to unitholders on record as at 30 Jul 2026; OUE REIT distributes income on a semi-annual basis.

Commercial assets (office and retail) generated revenue of S$86.0 million, almost flat YoY, and net property income of S$65.3 million, up 0.1 YoY, underpinned by a 4.7% positive rental reversion for Singapore offices and a 5.6% rental uplift at Mandarin Gallery. The hospitality portfolio led growth: revenue climbed 11.2% to S$50.1 million and NPI advanced 12.3% to S$45.1 million as RevPAR improved 10.7% YoY to S$258. Contributions from joint ventures and associates surged to S$10.4 million, reflecting OUE REIT’s maiden 19.9% stake in Sydney’s fully-let Salesforce Tower and refinancing savings at OUE Bayfront.

Finance costs fell 16.6% to S$37.77 million, aided by a lower average borrowing cost of 3.6% and a well-staggered 3.1-year debt maturity profile. Aggregate leverage stayed at 41.5%, while the interest-coverage ratio strengthened to 2.8 times. Committed occupancy across the Singapore office portfolio was 91.5%, down marginally amid tenant transitions; Mandarin Gallery’s occupancy eased to 94.7%.

During the half, the manager redeployed capital into the A$1.0 billion Salesforce Tower and, in June, announced the planned divestment of Crowne Plaza Changi Airport to recycle capital into higher-return opportunities. Asset-enhancement works at OUE Downtown, including lift modernisation and space upgrades, are underway ahead of major lease expiries.

Chief executive officer Han Khim Siew said the first-half performance reflected a diversified portfolio, active portfolio reconstitution and disciplined capital management, noting that reduced interest expenses and the Sydney acquisition bolstered earnings despite a challenging macroeconomic backdrop of “geopolitical friction, persistent inflation and elevated interest rates”. He added that OUE REIT will focus on rejuvenating its tenant mix in Singapore’s CBD offices, deepening corporate partnerships for its hotels and maintaining balance-sheet flexibility to pursue “emerging asset repricing opportunities”.

Looking ahead, the manager expects tight CBD office supply in Singapore and Sydney, measured new hotel openings and resilient retail demand to underpin rental growth through 2027. It projects continued flight-to-quality leasing and plans to narrow the trust’s 0.64-times price-to-book gap through selective acquisitions and value-creation initiatives.