Capitacommercial Trust's distributable income up 1.6 per cent in Q3

PHOTO: Capitacommercial Trust's distributable income up 1.6 per cent in Q3

SINGAPORE - Capitacommericial Trust (CCT) has posted an estimated distribution per unit (DPU) of 2.04 cents for the third quarter ended Sept 30, unchanged from the same period last year.

This was worked out on the basis that none of its convertible bonds maturing in the next four years is converted into CCT units.

Despite a 0.6 per cent decline in revenues to $94.9 million, distributable income in the third quarter rose by 1.6 per cent to $58.8 million.

That was thanks to lower interest expenses and contributions from Quill Capita Trust, an associate in Malaysia in which CCT has a 30 per cent stake.

CCT received $1.7 million of tax-exempt distributable income from Quill Capita Trust.

Finance costs of $14.5 million were 21 per cent lower owing to lower interest cost and the amortisation of transaction costs.

The decrease in revenue was blamed mainly on lower revenue contributions from Capital Tower and One George Street.

Capital Tower saw lower occupancy, while the yield protection income for One George Street ceased on July 10.

The yield-protected gross rental rate for One George Street translated to about $11.20 per sq ft (psf) per month, above the market rental rate.

With the cessation of the yield protection income, it resulted in lower gross revenue of the property compared with the same period last year.

CCT expects lower revenue at One George Street for the next nine months on a year-on-year comparison, though there are mitigating factors such as positive rent reversions from other properties.

With the exception of Capital Tower and One George Street, CCT saw higher revenues from other properties.

Its committed portfolio occupancy rate rose to 97.6 per cent as at the end of last month, up from 95.8 per cent for the second quarter ended in June.

For the nine months, DPU came in at 6.05 cents, up from six cents, while distributable income gained 2.2 per cent to $174 million.

On the debt front, CCT has refinanced bank loans ahead of the applicable maturity dates next year and in 2015, extending the average term to maturity of CCT's debt portfolio to 3.7 years.

Seventy-five per cent of CCT's borrowings are on a fixed-rate basis, which provides certainty of cash flow on the interest expense.

Mr Kee Teck Koon, chairman of CCT's manager, said: "The trust has a strong balance sheet with a low gearing at 29.5 per cent. Assuming a gearing of 40 per cent, CCT has a debt headroom of $1.2 billion for investment opportunities."

Ms Lynette Leong, chief executive of CCT's manager, said the trust should benefit from the uptick in office market rents as affirmed by market statistics.

She added: "The new and renewed office leases at our Grade A buildings were signed at an average effective rent of $9.81 psf per month, which was generally higher than the average market rent."

CCT's counter added two cents on Friday to end trading at $1.44.

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