CapitaLand Commercial Trust reports 10.1% rise in 4Q DPU to 2.39 Singapore cents

SINGAPORE (Jan 18): The manager of CapitaLand Commercial Trust (CCT) has reported a distribution per unit (DPU) of 2.39 Singapore cents for the 4Q2016 ended Dec.

This translates into a 10.1% increase from the 4Q2015 DPU of 2.17 Singapore cents.

For FY2016, CCT’s DPU increased by 5.3% to 9.081 Singapore cents from 8.62 Singapore cents a year ago.

On year, 4Q2016 gross revenue increased by 32.7% to S$89.7 million and net property income (NPI) grew by 35.4% to S$70.8 million.

This was a result of CapitaGreen’s contribution to CCT’s 4Q2016 gross revenue and NPI after becoming a wholly-owned property of the trust.

CCT’s acquisition of the remaining 60% interest in MSO Trust that owns CapitaGreen was completed on Aug 31, 2016.

As at Dec 31, 2016, CCT’s aggregate leverage remained unchanged at 37.8%. The average cost of debt stood at 2.6%. CCT has no refinancing requirements in 2017 except for the S$175 million convertible bonds due Sept 12 2017.

CCT’s portfolio occupancy rate remains resilient at 97.1% as at Dec 31, 2016, which was still above market occupancy rate of 95.8%. This was mainly due to higher year-on-year occupancy at CapitaGreen and Capital Tower.

In its outlook, CCT’s manager says average monthly office market rent further eased by 2.2% in 4Q2016 to S$9.10 per square foot.

“Since 1Q2015, Singapore’s CBD office market rents have declined by approximately 20%. In 2017, we may continue to see tenants’ flight to better quality office space and downward pressure on rents caused by stiff competition among landlords,” it adds.

Despite the challenging near-term market conditions, the manager says Singapore will remain an attractive office location for the long term especially among MNCs.

As at Dec 31, 2016, the trust’s investment properties, including its joint venture interest in Raffles City Singapore, have been assessed by independent valuers to be worth S$8.5 billion.

Units of CCT last traded at S$1.56. — theedgemarkets.com.sg