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What Investors Need To Know About CapitaCommercial Trust’s Performance In The Third Quarter

Higher revenue contribution from almost all properties at CapitaCommercial Trust (SGX: C61U), or CCT, helped to increase gross revenue from S$61.3 million last year to S$66.4 million in the third quarter this year. This was announced on Friday morning before the market opened.

CCT, which is part of CapitaLand Limited (SGX: C31), is the first and largest listed commercial real estate investment trust (REIT) in Singapore. The trust has a portfolio of 10 prime commercial properties in our country, as well as investments in Malaysia. In Singapore, it owns Capital Tower, Six Battery Road, One George Street, HSBC Building, and Raffles City (60% interest through RCS Trust), among others.

For the third quarter that ended 30 September 2014, gross revenue increased 8.4% year-on-year while net property income rose 8.6% to S$51.9 million. Distributable income to unit-holders was at S$61.6 million, 4.8% higher than last year, mainly on the back of higher net property income and higher distributable income from RCS Trust. The distribution per unit of 2.10 Singapore cents in the latest quarter was 2.9% higher than last year’s 2.04 cents.

Looking at the balance sheet, gearing ratio increased to 30.2%, as of 30 September, from 28.8%, as of 30 June, due to higher debt taken on. Average term to maturity of the loans was stable at 4 years while the average cost of debt improved slightly from 2.4% in the previous quarter to 2.3% in the latest quarter.

Ms Lynette Leong, Chief Executive Officer of the REIT’s manager, said, “CCT’s portfolio committed occupancy rate is high at 99.4%, which is above the market occupancy rate of 96.6% in 3Q 2014. Even with the high occupancy rate, we signed new leases and renewals of approximately 131,000 square feet, of which 17% are new leases. The overall signing rents for CCT’s Grade A office leases in 3Q 2014 are higher than the expiring rents. As a result, the monthly average office rent of CCT’s portfolio increased by 4.9% over the past 12 months from S$8.03 to S$8.42 per square foot.”

Going forward, asset enhancement initiative at Capital Tower will be completed by the fourth quarter of 2015. Also, office leases making up 18% of CCT’s portfolio gross rental income will be due for renewal next year, giving rise to potential rental upside.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.