Higher office rents add shine to CCT's bottom line

HIGHER rents from its office buildings and an increase in interest income helped Capita-Commercial Trust (CCT) improve its numbers for the first quarter.

Distribution income for the three months to March 31 increased 3.3 per cent from a year earlier to $55.7 million.

The trust's distribution per unit for the quarter was 1.96 cents, up 3.2 per cent from a year earlier.

CCT said the better results were mainly due to higher contributions from Twenty Anson, which was acquired in March last year, and higher rents from HSBC Building, collected from the end of April last year.

An increase in interest income from shareholder loans and lower interest expenses also helped lift distribution income.

Net property income for the quarter increased 7.1 per cent to $74.9 million.

CCT management chairman Kee Teck Koon said: "CCT's office portfolio is well positioned to benefit from positive rent reversions, given that the average rent of leases expiring in the rest of this year is lower than the average monthly office market rent as at the three months to March 31."

Revenue from all the trust's properties increased except for Capital Tower and Wilkie Edge.

Revenue for the quarter was $95.9 million, up 9.7 per cent from a year earlier.

Occupancy levels for the trust's office portfolio remained resilient at 95.3 per cent, compared with 93.2 per cent for office space in the Central Business District in the quarter.

CCT management chief executive Lynette Leong said the portfolio's average rents rose from $7.64 per sq ft in the fourth quarter of last year to $7.83 per sq ft in the first three months of this year.

She added that a total of 409,900 sq ft of new and renewed leases for office and retail space were signed in the quarter.

Its new tenants include General Mills Sales Singapore and the New Zealand High Commission.

Earnings per unit for the period came in at 1.9 cents, up from 1.76 cents a year earlier.

Net asset value per unit was $1.64 for the three months to March 31, down from $1.66 a year earlier.

Renovations at Six Battery Road should be finished by the end of the year, while work at Raffles City Tower will continue until the second quarter of next year.

The CapitaGreen development is due to be completed by the fourth quarter of next year.

CCT units closed down 4.5 cents at $1.66 yesterday.

Source: Straits Times, 20 Apr 2013