10 Quick Things That Investors Should Know About CapitaLand Commercial Trust’s Latest Results

CapitaLand Commercial Trust (SGX: C61U), or CCT, is one of the largest commercial real estate investment trusts (REITs) in Singapore by market capitalisation.

The REIT has ownership in a number of commercial properties in Singapore such as Capital Tower, Six Battery Road, and Bugis Village. It also has partial stakes in Raffles City Singapore and One George Street.

The REIT recently announced its fourth quarter results for the year ended 31 December 2017 (4Q FY2017). Here, I will look at 10 things that investors should know about its latest results:

1. Quarterly gross revenue declined 3.8% year-on-year while net property income (NPI) fell by 4% as compared to the same period last year.

2. Quarterly distribution per unit (DPU) was down by 13% as compared to a year ago. If adjusted for the rights issue undertaken in the second half 2017, DPU would have improved by 6.1% year-on-year.

3. Based on total FY2017 DPU of 8.66 cents and closing price of S$1.91 as at 26 January 2018, the distribution translated to a yield of 4.5%.

4. The latest gearing as at 31 December 2017 stood at 37.3%.

5. Committed occupancy rate stood at 97.3% as the end of December 2017.

6. The weighted average expiry profile was 5.9 years by net lettable area, with 60% of leases to expire from 2018 to 2020. The rest will expire after 2020.

7. Monthly average office rent of CCT portfolio grew 5.9% year-on-year to S$9.74 per square feet, driven mainly by inclusion of new acquisition, Asia Square Tower 2.

8. In terms of development activities, CCT is redeveloping Golden Shoe Car Park into an integrated development, rejuvenating Raffles City Singapore and piloting a project at Twenty Anson.

9. In FY2017, CCT acquired Asia Square Tower 2 and divested One George Street (50% interest), Golden Shoe Car Park (for redevelopment) and Wilkie Edge.

10. The following is the latest outlook provided by the REIT:

“Based on data from CBRE Pte. Ltd., Singapore’s Core CBD and Grade A occupancy rates are at 93.8% with Grade A occupancy rate tracking an uptick of 2.2%, up from 91.6% in 3Q 2017. Average monthly market rent for Grade A offices rose to S$9.40 psf in 4Q 2017, an increase of 3.3% y-o-y, signaling a recovery in the office market.

While lower net property income is expected in FY 2018 at some CCT properties as expiring rents are higher than current market rent, CCT will leverage rising market rents to close the gap between signing and committed rents. However, there will be flowthrough from negative rent reversions of leases committed in 2017.”

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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 Lawrence Nga doesn’t own shares in any companies mentioned.