Wilkie Edge, a 12-storey integrated development comprising office space, retail units and a serviced residence. (Photo: REITsWeek)Wilkie Edge, a 12-storey integrated development comprising office space, retail units and a serviced residence. (Photo: REITsWeek)

Singapore-listed office REIT, CapitaLand Commercial Trust (SGX:C61U) announced on 20 January that it has achieved a distribution per unit (DPU) of 2.17 Singapore cents for its 4Q 2015, a 0.9% increase from the 2.15 cents achieved in 4Q 2014.

This brings estimated DPU for the financial year ended 31 December 2015 to 8.62 cents, an increase of 1.9% from the 8.46 cents reported in 2014.

4Q 2015 distributable income of SGD64.1 million was up 0.8% year-on-year while full-year distributable income of SGD254.5 million in FY 2015 was 2.1% higher than the SGD249.2 million achieved in 2014. This was largely due to higher net property income from the REIT’s wholly owned properties and higher distributable income from Raffles City Singapore, said the REIT.

“The trust benefited from healthy rent reversions as most of the leases due for renewal were signed at rental rates higher than the expiring rents”, said Soo Kok Leng, Chairman of the REIT’s manager. “Our forehanded leasing strategy also contributed to a high committed portfolio occupancy rate for the trust”, he added.

“Asset enhancement initiatives to upgrade our older Grade A office buildings have been completed over the years. We have successfully redeveloped Market Street Car Park into CapitaGreen, and CapitaLand Commercial Trust will progressively reap income contribution from its 40.0% interest in CapitaGreen from 2016 onwards”, added Soo.

About 84% of the REIT’s total borrowings are on fixed interest rates while gearing is at 29.5%. Assuming a gearing level of 40.0%, the REIT has debt headroom of SGD1.3 billion. Committed portfolio occupancy rate rose to 97.1% from 96.8% a year ago, including CapitaGreen.

“While we expect to continue to face headwinds in the Singapore office market, we believe that CapitaLand Commercial Trust is well positioned and we will persist in maintaining its high and above-market occupancy rate as well as robust balance sheet”, said Lynette Leong, CEO of the REIT’s manager.

Estimated DPU for the financial period from 1 July 2015 to 31 December 2015 is 4.31 cents. Books closure date for 2H 2015 DPU is Thursday, 28 January 2016, and payment for the distribution is expected to be on Friday, 26 February 2016.

Units of CapitaLand Commercial Trust are currently trading 2.56% lower on the Singapore Exchange at SGD1.33 in line with losses across regional bourses.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.