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 CapitaLand Commercial Trust disclosed on 20 July that it has achieved an estimated distribution per unit (DPU) of 2.20 Singapore cents for its 2Q 2016, a marginal increase of 0.5% compared to the 2.19 cents recorded for 2Q 2015.

The DPU has been computed on the basis that none of the convertible bonds due 2017 is converted into units, said the REIT. The DPU may be adjusted should these bonds be converted on or before the books closure date, it added.

Gross revenue and net property income (NPI) for the period declined by 2.2% and 4.5% to SGD67.6 million and SGD51.5 million respectively.

The REIT has attributed these falls due to lower occupancy and higher operating expenses.

As at 30 June 2016, the office REIT’s aggregate leverage was at 29.8% with an average cost of debt of 2.5% per annum.

However, while CapitaLand Commercial Trust’s occupancy rate of 97.2% is still higher than the Singapore office market occupancy rate of 95.1% for the quarter, the REIT has also warned that supply of new office space in the country is expected to increase in the months ahead.

“The Singapore office market continued to see declines in occupancy and rental rates given the impending completion of above-average new office supply in the core central business district (CBD)”, said the REIT.

CapitaLand Commercial Trust said that it expects the full income contribution from its newly acquired property CapitaGreen to bolster NPI for 4Q 2016 onwards, possibly mitigating the effect of higher office supply.

Units of CapitaLand Commercial Trust last changed hands on the Singapore Exchange 1.2% lower from its previous close at SGD1.55.

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.