CCT achieved higher distributable income in 3Q 2013 despite cessation of One George Street’s yield protection income
Robust balance sheet with low gearing of 29.5 per cent provides financial flexibility
Singapore, 18 October 2013 – CapitaCommercial Trust Management Limited, the Manager of CapitaCommercial Trust (CCT or Trust), is pleased to report a distributable income of S$58.8 million for the financial quarter ended 30 September 2013 (3Q 2013), which was 1.6
The gross revenue of S$94.9 million in 3Q 2013 was only marginally lower than the S$95.5 million achieved in 3Q 2012. Higher revenue from Six Battery Road and Raffles City Singapore compensated for the lower income contribution from Capital Tower due to its lower
The Trust’s unaudited Consolidated Financial Statements for 3Q 2013 and Year-to-date September 2013 results are available on its website (www.cct.com.sg) and on SGXNet (www.sgx.com).
Summary of CCT’s 3Q 2013 and Year-to-date September 2013 Results
|
3Q 2013 |
3Q 2012 |
Change % |
YTD Sep 2013 |
YTD Sep 2012 |
Change % |
Gross Revenue (S$’000) Net Property Income (S$’000) Distributable Income (S$’000) |
94,941 72,564 58,775 |
95,539 75,167 57,869 |
(0.6) (3.5) 1.6 |
288,367 222,335 174,035 |
278,731 220,349 170,249 |
3.5 0.9 2.2 |
Estimated Distribution Per Unit - For the period |
2.04¢1 |
2.04¢ |
- |
6.05¢1 |
6.00¢ |
0.8 |
Mr Kee Teck Koon, Chairman of the Manager, said, “CCT’s portfolio has performed well in the third quarter despite the cessation of One George Street’s yield protection income in July 2013 and the uncertain economic environment. Our intensified marketing and leasing efforts have translated into higher committed portfolio occupancy rate of 97.6 per cent as at 30 September 2013. Higher rents have also been secured for most new leases and renewals for the year
Mr Kee added, “The Trust has a strong balance sheet with a low gearing at 29.5 per cent. Assuming a gearing of 40.0 per cent, CCT has a debt headroom of S$1.2 billion for investment opportunities. However, we remain disciplined in our acquisition approach with a focus on Singapore properties having a strategic fit with and value accretion to our existing portfolio.”
Ms Lynette Leong, Chief Executive Officer of the Manager, said, “We are encouraged by the increase in leasing activities at CCT’s properties. CCT has signed new leases and renewals of approximately 347,000 square feet for 3Q 2013, of which 42.0
She added, “The new and renewed office leases at our Grade A buildings were signed at an average effective rent of S$9.81 per square foot per month, which was generally higher than the average market rent. Meanwhile, our monthly average office portfolio rent continues its uptrend, increasing by 0.9 per cent to S$8.03 per square foot per month this quarter. Given the uptick in office market rents as affirmed by market statistics, CCT should further benefit from positive rent reversions for 13 per cent of office leases based on portfolio gross rental income that
New and renewed tenants for 3Q 2013 include CapitaLand Limited, Wilfred T. Fry (Personal Financial Planning) Limited, Hay Group Pte Ltd, Rakuten Asia Pte. Ltd., MacGregor Pte. Ltd., Diageo Singapore Pte. Ltd. and SAS Institute Pte Ltd.
Robust Capital Management
In September 2013, the Manager proactively extended CCT’s committed term loan facilities for an aggregate amount of S$450.0 million and a revolving credit facility of S$100.0 million, which would otherwise expire in 2014 and 2015 respectively. A new committed revolving credit facility of S$100.0 million was also secured. These new bank facilities aggregating S$650.0 million will have maturity dates ranging from 2018 to 2020, thereby extending the average maturity of CCT’s debt portfolio from 2.8 years to 3.7 years. Despite the expectation of a rising interest rate environment, the Manager has successfully reduced the average cost of debt per annum from 2.8 per cent as at 2Q 2013 to 2.7 per cent as at 3Q 2013. About 75.0
Outlook for Singapore Central Business District (CBD) Office Market
The average office occupancy rate in Singapore’s CBD decreased by 1.6 per cent to 93.5 per cent in 3Q 2013 from 95.1
The outlook for the office market is sanguine given the consistent demand across active and diverse sectors such as professional services, energy and commodities, insurance and IT. Additionally, a number of sizeable tenants have activated relocation plans to better quality office buildings with increased space requirements; this also contributes to the optimistic view.
Historically, the net absorption for CBD office averaged approximately 1 million square feet annually from 1994 to mid-2013, almost equally matched by approximately 1 million square feet of average annual net supply over the same period. The forecast for Singapore CBD’s annual new office supply from 2014 to 2018 averages about 1.1 million square feet. However, for 2014 and 2015, the actual new office completion in the CBD area is expected to be limited to only 1.2 million square feet for the two years. CCT’s Grade
1 DPU for 3Q 2013 and YTD September 2013 were computed on the basis that none of the convertible bonds due 2015 (“CB due 2015”) or convertible bonds due 2017 (“CB due 2017”) collectively known as “Convertible Bonds”, is converted into CCT units. Accordingly, the actual quantum of DPU may differ if any of these Convertible Bonds is converted into CCT units.