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)

CapitaLand Commercial Trust has reported a DPU of 2.39 Singapore cents for its 4Q 2016, an increase of 10.1% over the 2.17 cents recorded in the corresponding period of 2015.

Gross revenue for the quarter increased by 32.7% year-on-year to SGD89.7 million (USD63.2 million) while net property income (NPI) grew by 35.4% to SGD70.8 million.

Correspondingly this brings the office REIT’s full-year DPU for 2016 to 9.08 cents, an increase of 5.3% from the 8.62 cents recorded for FY2015.

The REIT has attributed the results to contribution from CapitaGreen, which became a wholly-owned property of the REIT in August 2016.

“The acquisition is a strong testament to the successful execution of our portfolio reconstitution strategy resulting in not only an enhancement of the quality of [CapitaLand Commercial Trust’s] portfolio but also improved financial return”, said Soo Kok Leng, Chairman of the REIT’s manager, in a statement on the results.

“Our proposed redevelopment of Golden Shoe Car Park represents another value creation opportunity which will potentially further strengthen [CapitaLand Commercial Trust’s] foothold and position as the largest office landlord in Singapore’s central business district”, he added.

The REIT’s committed portfolio occupancy as at 31 December 2016 was at 97.1%, while aggregate leverage was unchanged from the previous quarter at 37.8%, with an average cost of debt of 2.6%.

For 2017, the REIT expects downward pressure on rents due to stiff competition among landlords, and a flight to better quality office space.

“While negative rent reversions are expected to continue, [CapitaLand Commercial Trust’s] DPU for FY 2017 is, nevertheless, expected to be stable barring unforeseen circumstances, and supported by the income contribution from [the REIT’s]100% ownership in CapitaGreen”, it said.

The 2H 2016 DPU is expected to be paid on 27 February 2017 as the REIT pays its distributable income semi-annually.

Units of CapitaLand Commercial Trust last changed hands on the Singapore Exchange at SGD1.58.

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.