CapitaLand Commercial Trust posts 10.1% rise in Q4 DPU to 2.39 cents

CapitaLand Commercial Trust (CCT) announced on Wednesday (Jan 18) a 10.1 per cent increase in distribution per unit (DPU) to an estimated 2.39 Singapore cents for the fourth quarter ended Dec 31, 2016.
CapitaLand Commercial Trust (CCT) announced on Wednesday (Jan 18) a 10.1 per cent increase in distribution per unit (DPU) to an estimated 2.39 Singapore cents for the fourth quarter ended Dec 31, 2016.PHOTO: CAPITALAND COMMERCIAL TRUST

SINGAPORE - CapitaLand Commercial Trust (CCT) announced on Wednesday (Jan 18) a 10.1 per cent increase in distribution per unit (DPU) to an estimated 2.39 Singapore cents for the fourth quarter ended Dec 31, 2016, from the year-ago period.

This came on the back of CapitaGreen's contribution to CCT's fourth quarter gross revenue and net property income (NPI) after becoming a wholly-owned property of the trust. CCT's acquisition of the remaining 60 per cent interest in MSO Trust that owned CapitaGreen was completed on Aug 31, 2016.

For the fourth quarter, revenue jumped 32.7 per cent to S$89.7 million, while NPI grew by 35.4 per cent to S$70.8 million.

For the full fiscal year 2016, CCT's DPU increased by 5.3 per cent to 9.08 cents. Based on CCT's closing price per unit of S$1.565 on Jan 17, CCT's distribution yield is 5.8 per cent.

Looking ahead, CCT's manager said it may continue to see tenants' flight to better quality office space and downward pressure on rents caused by stiff competition among landlords.

"While negative rent reversions are expected to continue, CCT's DPU for FY 2017 is, nevertheless, expected to be stable barring unforeseen circumstances, and supported by the income contribution from CCT's 100 per cent ownership in CapitaGreen," said the trust manager.

CCT's manager said its portfolio has remained resilient with 97.1 per cent occupancy rate, while only about 6 per cent of leases by occupied office net lettable area are due for renewal in 2017.

Ms Lynette Leong, chief executive officer of the trust manager, added: "We do not expect to be significantly affected by rising interest rates given that about 80 per cent of CCT's borrowings are on fixed interest rates and that it has minimal debt due for refinancing in 2017.

"Beyond the current challenging market conditions, we are looking at the next wave of the office market upcycle as well as 'the future of work' - that is, how the way people work will possibly evolve in the future given the trend of globalisation, mobility and digital technology - and incorporate that in our evaluation of the financial feasibility of the redevelopment of Golden Shoe Car Park, while seeking approvals from the government authorities. Our wish is to replicate the success of CapitaGreen so as to spark a new growth catalyst for the trust."

Apart from capitaGreen and Golden Shoe Car Park, CCT's portfolio as of Dec 31 consists of Capital Tower, Six Battery Road, One George Street, HSBC Building, Bugis Village, Wilkie Edge, Twenty Anson and 60 per cent interest in Raffles City Singapore held through RCS Trust. It also owns 11 per cent of MRCB-Quill Reit, a commercial Reit listed in Malaysia.