CAPITACOMMERCIAL Trust (CCT) has posted a 20.8 per cent year-on-year increase in distributable income for the third quarter to $52.14 million.
Net property income rose by 15.5 per cent to $77.1 million on the back of positive rent reversions as well as cost savings from lower property taxes.
In addition, CCT’s distributable income for Q3 was boosted by lower interest expense arising from the prepayment in July of a $664 million debt from proceeds from the trust’s rights issue in June.
CCT’s distribution per unit (DPU) for Q3 ended Sept 30, 2009, was 1.85 cents, down from 3.10 cents in Q3 last year.
After adjusting for the issued rights units, the DPU rose from 1.54 cents to 1.85 cents, the trust manager said. Unitholders will not receive any distribution for Q3 as the trust distributes semi-annually.
The trust’s distributable income for the first nine months of this year rose 26.5 per cent to $145.6 million. Net property income improved 31.2 per cent to $220.2 million.
Given the positive rental reversions, the average monthly office rent for CCT’s portfolio has improved about 18 per cent over the past year, from $7.20 per square foot per month as at end-Q3 2008 to $8.49 psf as at end-Q3 2009.
CapitaCommercial Trust Management Ltd (CCTML) chief executive Lynette Leong is upbeat about Singapore office demand returning to positive territory and rental rates stabilising.
‘From our experience of recent increased office leasing enquires, our tenants’ feedback on better business prospects and, to some extent, a few tenants even asking for more space, I think that these are positive signs of demand returning,’ she said.
‘The recent better GDP figures also support the more upbeat economic environment, and we are comforted that the worst is behind us. What it also means is that the negative demand that we’d seen in the office market has been capped, and to what extent the ‘needle’ moves to positive will depend on the rate of economic recovery,’ she added.
CCT, with a total asset size of $6.3 billion as at Sept 30, 2009, has 11 properties in Singapore and holds investments in Malaysia. Among CCT’s Singapore properties that saw significant improvements in net property income between Q3 last year and Q3 2009 were Capital Tower, Six Battery Road and Raffles City.
While the rate of decline in office rents eased and leasing activity improved in Q3, uncertainties still loom over the office market, with pressure from secondary supply and new office supply that will be added to the market, CCTML acknowledged.
The trust owns 60 per cent of Raffles City, with the other 40 per cent held by CapitaMall Trust. The duo will begin reconfiguring basement 1 space in the mall this quarter.
The total capital expenditure for the initiative is about $33.2 million with an expected 8 per cent return on investment. The works will, among other things, connect the current City Hall MRT Station to the new Esplanade Station through Raffles City’s basements 1 and 2.
The Esplanade Station is expected to open by Q3 2010. ‘With this latest link to the Circle Line, there will be three train lines bringing shoppers to Raffles City,’ CCTML said.
Source : Business Times – 22 Oct 2009
Lush Dream Home 