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What Investors Should Know About CapitaLand Commercial Trust’s Latest Earnings

Yesterday, CapitaLand Commercial Trust (SGX: C61U) or CCT reported its first quarter result for the financial year ending December 2019. As a quick introduction, CCT is one of the largest commercial real estate investment trusts (REITs) in Singapore by market capitalization.

Here, we will look at nine things that investors should know about its latest results.

  1. Gross revenue grew 3.5% year-on-year to S$99.8 million while net property income (NPI) improved by 3.4% as compared to the same period last year to S$79.8 million.
  2. Distribution per unit (DPU) for the quarter was up by 3.8% as compared to the same period last year to 2.20 cents.
  3. Based on its annualised DPU of 8.8 cents and closing price of S$1.93 (as of writing), CCT has a distribution yield of 4.6%.
  4. As of 31 March 2019, the REIT’s gearing was 35.2%, which is a safe distance from the regulatory ceiling of 45%.
  5. The REIT’s committed occupancy rate stood at 99.1% at the end of the quarter.
  6. The weighted average expiry profile stood 5.7 years by NLA (net lettable area).
  7. In the quarter, CCT signed over 225,000 square feet of new leases and renewals, of which 18% were new leases. Rental reversions for most of the office leases signed were positive.
  8. The top 10 tenants accounted for 37% of gross rental income.
  9. Here’s the outlook provided by the REIT:

“The monthly Grade A office market rent in Singapore increased by 3.2% year-on-year to S$11.15 per square foot in 1Q 2019, according to data from CBRE Research. Occupancy in Singapore’s Core CBD office buildings as at end March was 95.4%, up from 94.8% in the previous quarter. Barring unforeseen events affecting macro environment, the Singapore office market is expected to see continued rental growth in 2019.

Prime office market rent in Frankfurt has remained resilient through property cycles. Vacancy rates have declined to record lows in the Banking District, where Gallileo is located, due to active office leasing. Leasing commitments at new developments have also increased.”

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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. The Motley Fool Singapore recommends CapitaLand Commercial Trust.