CapitaLand Commercial Trust 3Q18 net property income up 37 percent on acquisitions

Six Battery Road with CapitaLand and CapitaLand Commercial Trust signage; taken October 2018.Six Battery Road with CapitaLand and CapitaLand Commercial Trust signage; taken October 2018.

CapitaLand Commercial Trust reported on Friday that its third quarter net property income rose 37.3 percent on-year to S$80.40 million on contributions from acquisitions.

Gross revenue for the quarter ended 30 September rose 35.6 percent on-year to S$100.5 million, mainly on contributions from Asia Square Tower 2 and Gallileo, partly offset by the loss of revenue from the divestments of Wilkie Edge and Twenty Anson, the trust’s manager said in a filing to SGX on Friday.

The distribution per unit (DPU) rose 8.9 percent on-year to 2.20 Singapore cents from 2.02 Singapore cents in the year-earlier quarter, it said.

Property operating expenses rose 29 percent on-year in the quarter to S$20.11 million, mainly on higher professional fees, it said.

Finance costs increased by 73.6 percent on-year in the quarter to S$25.6 million, primarily on higher borrowings for the acquisitions of AST2 and Gallileo, as well as expenses and fees in relation to the prepayment of bank borrowings and pre-termination of interest rate swaps, it said. After completing the divestment of Twenty Anson, S$500.0 million of the net proceeds was used to pre-pay existing higher interest rate borrowings, it said.

Kevin Chee, CEO of the trust manager, noted that since taking ownership of Asia Square Tower 2, occupancy at the building rose to 98.1 percent as of the end of third quarter from 90.5 percent at end-December.

“The significant improvement demonstrates CCT’s firm commitment to creating value for unitholders,” he said in the statement.

The Singapore portfolio occupancy was at 99.1 percent at end-September, above the market level of 94.6 percent, the statement said.

For the nine-month period, net property income rose 19.2 percent on-year to S$197.51 million, while gross revenue increased 17.4 percent on-year to S$251.17 million, it said. The DPU for the nine-month period was 6.48 Singapore cents, down from 6.58 Singapore cents in the year-ago period, it said.

CCT has a portfolio of nine commercial properties in Singapore: Capital Tower, CapitaGreen, Asia Square Tower 2, Six Battery Road, a 60 percent interest in Raffles City, a 50 percent interest in One George Street, 21 Collyer Quay (HSBC Building), Bugis Village and a 45 percent interest in CapitaSpring, which is an upcoming 51-storey integrated development in Raffles Place. It also has one property in Frankfurt, Germany.