Higher net property income from its wholly owned properties and higher distributable income from Raffles City Singapore boosted fourth-quarter income at CapitaLand Commercial Trust (CCT), the trust manager said yesterday.
Distributable income rose 0.8 per cent to $64.1 million for the three months to Dec 31 and was up 2.1 per cent to $254.5 million for the year.
As a result, distribution per unit (DPU) was 0.9 per cent higher at 2.17 cents for the quarter and up 1.9 per cent to 8.62 cents for the 12 months.
This translates into a distribution yield of 6.3 per cent, based on its closing price per unit on Tuesday, the trust's manager said yesterday - 389 basis points above the 10-year government bond yield.
It recorded a 1.9 per cent rise in gross revenue to $67.6 million for the quarter, due to positive rent reversions for all buildings except for a marginal decrease at Golden Shoe Car Park due to lower average occupancy and lower revenue.
AT A GLANCE
$67.6 million (+1.9%)
NET PROPERTY INCOME:
$52.3 million (+3.2%)
$64.1 million (+0.8%)
DISTRIBUTION PER UNIT:
2.17 cents (+0.9%)
Gross revenue for the year rose 4.0 per cent to $273.2 million due to positive rent reversions or higher occupancies for most of the CCT properties, except for Twenty Anson and Golden Shoe Car Park.
Net property income rose 3.2 per cent to $52.3 million in the quarter and 3.7 per cent to $212.8 million for the year.
The trust has about $626 million in debt maturing this year, or about 27 per cent of total borrowings.
These relate to Raffles City, of which CCT holds 60 per cent via the RCS Trust. CapitaLand Mall Trust (CMT) owns the other 40 per cent. A large portion of this debt is at 3.09 per cent a year while another portion is at 3.025 per cent.
"Given the current interest rate scenario, we expect interest cost at RCS Trust to be a little higher," Ms Anne Chua, head of finance for CCT's manager, said at a briefing yesterday.About 84 per cent of CCT's borrowings are on fixed rate, which should lower exposure to interest rate risks, said Ms Lynette Leong, the chief executive of CCT's manager.
Analysis of the impact of rising interest rates on the floating rate borrowings found that every rate rise of 0.5 per cent would cause a fall of 0.03 cents in DPU, or about 0.4 per cent of last year's DPU.
Ms Leong also addressed market talk that it is seeking to sell One George Street and Wilkie Edge.
"There are a lot of investors still interested in acquiring good quality office buildings... We are open provided the price is right, but if they only follow our valuation (which is very conservative), then price is not right."
She also noted that there are many hurdles if Golden Shoe Car Park is to be redeveloped this year over and above whether the Urban Redevelopment Authority would grant permission.
These include having to engage the Ministry for Environment and Water Resources, which owns the hawker centre, and negotiating with Singapore Land Authority about paying a differential premium.
CCT units closed down 3.5 cents to $1.33 yesterday.