Industrial landlord Cambridge Industrial Trust (CIT) reported distribution per unit (DPU) of 1.078 Singapore cents for the second quarter, a 12 per cent decline from the same period a year earlier amid slowing economic growth.
Gross revenue for the three months ended June 30 rose 1.7 per cent to $28.3 million, but net property income dipped 2 per cent to $21.2 million.
This was due mainly to higher property operating expenses incurred for new and renewed leases, as well as the ongoing conversion of assets from single tenancy to multi-tenancy.
Net asset value per unit was 66.9 cents as at June 30, down from 67.3 cents as at Dec 31.
The manager of the trust said more challenging times lie ahead.
AT A GLANCE
DPU: 1.078 cents (-12%)
GROSS REVENUE: $28.3 million (+1.7%)
NET PROPERTY INCOME: $21.2 million (-2%)
The industrial leasing market is expected to remain soft in view of the weak demand from muted global economic prospects, and rents will remain under pressure from increased competition and supply of industrial space.
The conversion of properties from single tenancy to multi-tenancy is also expected to continue having a negative impact on portfolio occupancy and net property income over the rest of the year.
The trust manager "holds a cautious outlook of the industrial sector and continues to focus on tenant retention, cost savings measures and proactive asset management", it said in its exchange filing yesterday.
"The difficult economic environment creates challenges for our clients and in turn may continue to affect our performance," said Mr Philip Levinson, the chief executive officer of Cambridge Industrial Trust Management.
"We see the current challenging market as an opportunity to recalibrate our current business and lay the groundwork for the future. We are progressing well on the execution of our strategy to recycle capital through the sale of non-core properties and reduce gearing," he added.
Trust units closed 0.5 cent lower at 56.5 cents yesterday.