CCT sees distributable income rise 3.4% for Q1

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On April 23, 2012
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Straits Times: Sat, Apr 21

OFFICE landlord CapitaCommercial Trust (CCT) posted a 3.4 per cent rise in first- quarter distributable income to $53.9 million, thanks to higher interest income and a slide in trust and interest expenses.

The increase came despite a fall in gross revenue for the period ended March 31.

This resulted in a distribution per unit to investors of 1.9 cents, up 3.3 per cent on the distribution per unit in the same quarter a year earlier.

Based on Thursday’s closing price of $1.245 per unit, CCT’s distribution yield works out to 6.1 per cent.

Gross revenue dipped by 3.9 per cent to $87.4 million as a result of a lower occupancy rate, as well as office rents that were signed being lower than expired rents.

However, the trust’s net property income was unchanged at $69.9 million as a result of lower property expenses.

CCT management team chairman Richard Hale said: ‘We are pleased with the trust’s performance in the first quarter of 2012 even in the midst of economic uncertainty. Having completed all refinancing for 2012, the trust’s balance sheet is further strengthened.’

Mr Hale pointed out that the acquisition of prime office building Twenty Anson, which was completed last month, will contribute income for a full quarter starting from the current second quarter this year.

He also noted the trust’s 40 per cent interest in CapitaGreen, an office tower being developed on the former Market Street carpark site, as a growth opportunity for CCT.

CapitaGreen broke ground in February this year and is expected to be completed by the fourth quarter of 2014.

Chief executive Lynette Leong noted that CCT had successfully refinanced a $570 million loan – that had been due on March 16 and secured on Capital Tower – with unsecured facilities from banks.

‘CCT’s gearing at 30.5 per cent is still at the low end of our target range, giving us good headroom for future investment opportunities,’ said Ms Leong.

Despite the trust’s positive growth, CCT reported that the near- to medium- term outlook remains highly uncertain.

It said in a statement: ‘While progress in sovereign debt negotiations and long-term refinancing operations carried out by the European Central Bank have helped to ease liquidity constraints, market confidence remains fragile.

‘As a result, the demand for office space is expected to remain subdued.’

CCT is managed by CapitaCommercial Trust Management, an indirect wholly owned subsidiary of real estate group CapitaLand.

Source: The Straits Times © Singapore Press Holdings Ltd.

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