CapitaLand Commercial Trust’s 1Q2017 DPU rises 9.6% to 2.4 S'pore cents

SINGAPORE (April 19): The manager of CapitaLand Commercial Trust (CCT) has declared an estimated distribution per unit (DPU) of 2.4 Singapore cents for 1Q17, 9.6% up from 2.19 Singapore cents a year ago.

Distributable income for the quarter grew 9.9% to S$71.3 million, largely contributed by CapitaGreen given CCT’s increase in ownership from 40% to 100% from Aug 31, 2016.

Group net property income (NPI) grew 24.3% to S$69.8 million from S$52 million 1Q16.

Gross revenue for 33.9% to S$89.5 million (RM282.23 million) from S$66.8 million a year ago, mainly due to increased contributions from CapitaGreen and Capital Tower, as well as the consolidation of CapitaGreen’s revenue and net property income (NPI) to CCT Group in 1Q17.

In a premarket filing to the SGX on Wednesday, the manager of CCT says it expects CapitaGreen to continue being a significant contributor to CCT’s distributable income, and mitigate negative rent reversions experienced by other assets in the portfolio.

It notes that CCT’s portfolio has remained resilient despite market headwinds, with a 97.8% occupancy rate and only about 5% of leases by occupied office net lettable area being due for renewal in the next nine months in 2017, of which 30% are in advanced negotiations.

Nonetheless, the manager continues to expect downward pressure on office market rents, with the net property income of some properties in CCT’s portfolio to soften in the later part of 2017 as more renewals and new leases are committed below expiring rents.

“In line with our portfolio reconstitution strategy to proactively rejuvenate the Trust’s portfolio and enhance returns to our unitholders, we submitted plans to redevelop Golden Shoe Car Park in the second half of 2016. We have now obtained the Urban Redevelopment Authority’s provisional permission for the proposed redevelopment and await the Singapore Land Authority’s assessment of the differential premium (DP) payable for the potential enhancement in land use,” says Lynette Leong, CEO of the manager.

“Only when the DP is known can we complete the feasibility study of the proposed redevelopment and determine whether or not to proceed with it,” she adds.

Units of CCT closed 1 Singapore cent higher at S$1.62 on Tuesday. — theedgemarkets.com.sg

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