CapitaLand Commercial Trust (CCT) is poised to ride the upward trend for office rents with its redevelopment of Golden Shoe Car Park set to hit the market at an opportune time.

Its bullish stance comes despite the possibility in coming months of negative rental reversions, which occur when leases are renewed at lower rates.

It noted at a results briefing yesterday that some of these leases were signed at a time when rents were particularly high.

The firm posted a 3.2 per cent rise in distribution per unit (DPU) to 2.27 cents for the second quarter, up from 2.2 cents for the same period a year earlier.

Gross revenue increased by 29.5 per cent to $87.5 million in the three months to June 30 while net property income grew by 34.3 per cent to $69.1 million.

Ms Lynette Leong, chief executive of the trust's manager, credited the rise in property income to CapitaGreen, which she called "the star in our portfolio".

CCT is hoping to replicate the winning formula for the Golden Shoe Car Park site in Market Street and is working with the same partners it did with CapitaGreen - Capitaland Group and Mitsubishi Estate Asia.

The 280m-high block to be built on the site will be an integrated development of serviced residences and retail units.

The food centre will remain, but will be in a "modern structure", said Ms Leong.

The project, which will cost $1.82 billion, should get its temporary occupation permit (TOP) in the first half of 2021, when new office supply is expected to "taper off significantly".

But Ms Leong acknowledged that the trust manager may be a "victim of our own success", and expects more negative rental reversions.

"Negative rental reversions are something we cannot avoid, but they are not significant," she said.

For instance, average expired leases in its Six Battery Road offices were $12.37 per square foot per month in the second quarter, but new committed rents were between $10.40 and $13.80 psf - still above market rates.

"We have had a very good run, and we are looking at the peak. There will be further negative rental reversions, although it's not that significant."

The trust has a portfolio of 10 commercial properties here, including Capital Tower, CapitaGreen and One George Street. It had a committed occupancy rate of 97.6 per cent as at June 30.

The trust manager is revamping its portfolio, having announced the sale of One George Street and Wilkie Edge earlier this year.

The divestment proceeds will be used to fund the trust's share of capital in the re-development of Golden Shoe Car Park and pay off debt.

It will also be used to make up the loss of distributable income in the second half of this year from the two sold assets, said Ms Leong.