Singapore-listed Cambridge Industrial Trust has reported a DPU of 0.996 Singapore cents for its 4Q 2016, a fall of 12.6% year-on-year compared to the 1.139 cents achieved in the corresponding period of 2015.
Gross revenue for the period fell by 2.5% to SGD27.8 million (USD19.5 million), while net property income fell by 8.8% to SGD19.7 million.
Subsequently the industrial REIT’s DPU of 4.173 cents for FY2016 represents a 12.9% decrease year-on-year from what was paid for FY2015.
“However, after adjusting FY2015 DPU to exclude one-off capital distribution and management fees paid in units, FY2016 DPU would have been 5.7% lower than the previous year”, said the REIT in its statement on the results, noting that 2016 was a tough year for the industry as a whole.
“The strategy of capital recycling and divestment of non-core properties in FY2016 enabled the [REIT] to remain nimble in a challenging environment”, said Shane Hagan, acting CEO of the Cambridge Industrial Trust’s manager.
“Despite keen market competition, [Cambridge Industrial Trust] has successfully leased 1.67 million square feet of space during the year with proactive occupancy management, a jump from 1.02 million square feet in FY2015”, he added.
The REIT’s portfolio occupancy for the period was 94.7% with a weighted average lease expiry (WALE) of 3.7 years.
As at 31 December 2016, Cambridge Industrial Trust’s gearing ratio was at 37.5% with an all-in cost of debt of 3.71% per annum.
“Looking ahead into FY2017, we expect the industrial leasing market to remain challenging”, said Hagan.
“At the same time, at [Cambridge Industrial Trust] we are at the tail end of an extended cycle of conversions from single-tenanted properties to multi-tenanted properties which has been the key reason for the weakening DPU in the last few quarters”, he noted.
“I am confident that [the REIT]is well positioned in the longer term to capture opportunities as they arise”.
Units of Cambridge Industrial Trust last changed hands on the Singapore Exchange at SGD0.56.