COMMERCIAL PROPERTY | Staff Reporter, Singapore

Time bomb on OUE Bayfront's income support starts ticking

But the level of income support it uses still rose 11.5% in 9M2017.

The expiry of OUE Bayfront’s income support is now within a one-year horizon in January 2019.

According to OCBC Investment Research, this income support involves the sponsor providing a top-up of the gross rental income of the property should it fall below $14.25m in a quarter, subject to maximum annual and aggregate limits of $12.0m and $50.0m, respectively.

Within nine months of 2017, the level of income support drawn on is estimated to be around $2.3m, which represents an increase of 11.5% YoY.

OCBC said that OUE Bayfront’s committed office occupancy of 98.2% can be utilised.

"We think that 2018 will be a year for OUECT to capitalize on the improving market sentiments to establish firmer rental reversions, in order to mitigate the removal of the sponsor’s income support," OCBC analyst Joseph Ng said.

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