This shows OUEHT’s potential recovery from its previous declines.
DBS Group Research reported that Mandarin Gallery’s property occupancy increased to 96.9% YoY, from 94.1% in 4Q2016.
Mandarin Gallery showed a decline in occupancies, negative rental reversions, and fit-out period associated with new Michael Kors and Victoria’s Secret stores in 2016.
Rental reversion for base rent also increased by 3.8% YoY for leases signed in 4Q2017, whilst tenant sales rose by 4.5% YoY.
16% of leases by gross rent are up for renewal, with about two-thirds are related to F&B tenants expiring in Q4 this year, and OUEHT hopes to achieve positive rental reversions for these leases, DBS said.
“Beyond 2017, we expect contribution from Mandarin Gallery to remain modest as it is likely to face pressure on rents owing to the weak retail scene in Singapore,” DBS said.
Singapore Business Review previously reported that OUEHT’s property income inched down by 1.1% to $29.23m in 4Q2017, with Mandarin Gallery’s effective rent psf/m priced at $22.8 in 4Q2017, from $23.6 in the same quarter in the previous year.
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