Cambridge Industrial Trust reports 18% fall in Q3 DPU

Property of Cambridge Industrial Trust, a five-storey block at Tai Seng Street.
Property of Cambridge Industrial Trust, a five-storey block at Tai Seng Street.PHOTO: CAMBRIDGE INDUSTRIAL TRUST

SINGAPORE - Cambridge Industrial Trust (CIT) reported a 18 per cent fall in distribution per unit (DPU) to 0.987 Singapore for the three months to Sept 30 from 1.204 cents in the year-ago quarter.

Net property income for the third quarter declined 8.3 per cent to S$19.9 million from S$21.7 million a year ago.

The decline was mainly due to higher operating expenses of properties converted from single-tenanted property to multi-tenancy, divestment of a property and head lease expiry of a property. This was partially offset by revenue contribution from leasing and rental escalations of several properties.

Said Mr Philip Levinson, CEO of the trust's manager: "Despite challenging economic conditions during the quarter, I am encouraged to report steady progress in our strategy to divest non-core properties and recycle capital to optimise our portfolio and capital structure.

"In this quarter, we have fully unencumbered our property portfolio and have no major refinancing requirements until the second half of 2018, which provide us with greater operational and financial flexibility."

As at Sept 30, occupancy for CIT's portfolio comprising 205 tenants across 50 properties remained stable at 93.6 per cent, with weighted average lease expiry improved to 3.8 years. Approximately 1.2 million sq ft of space was renewed in the first nine months of 2016, with a negative rental reversion of 4.5 per cent.

Added Mr Levinson: "Looking into the final quarter of 2016, we remain cautious on the industrial leasing market due to muted global economic prospects and continued rental pressure.

"That said, we are staying the course and will continue to focus on tenant retention, cost-savings and proactive asset management to maintain our performance and deliver value to unitholders."