CapitaCommercial Trust FY distribution per unit up 28.8%

CapitaCommercial Trust (CCT) said it will pay 1.88 Singapore cents per unit for its fiscal fourth quarter.

The distribution per unit is 38 per cent higher than a year ago, after adjusting for a rights issue last year.

The commercial rental market improved over the course of 2009, resulting in higher rental income for CCT from positive rent reversions. The acquisition of Wilkie Edge office building in December 2008 also contributed to earnings.

For the whole of last year, CCT saw its distribution per unit rise by 28.8 per cent on-year to 7.06 cents. Its distributable income for 2009 was up about 30 per cent to S$199 million.

Lynette Leong, CEO, CapitaCommercial Trust said: “We are able to generate higher and higher income, and that is due to our cost-savings measures, as well as lower property tax contributing to a high net property income; also due to lower trust expense as well as lower borrowing costs to some extent, contributing to a higher distributable income.”

CCT said it is reviewing plans for the StarHub Centre at Cuppage Road. It has been given permission to change the use of the property to a mixed residential and commercial development.

Subject to other approvals, a maximum 80 per cent of the site’s gross floor area can be use for residential purposes, and the remainder for commercial space.

CCT also said it is selling its Robinson Point building to a private fund managed by AEW Asia for S$203.25 million. The price is 11.4 per cent higher than valuation as at December 31 last year. The agreement was signed on Tuesday and is expected to be completed by April.

Going forward, CCT said it is optimistic about the future.

Ms Leong said: “The economy has gone out of recession, and the forecast for GDP growth next year is positive. So we think that this will be impetus to drive office demand.

“There is still supply that is completing this year, but the good news is that there have been pre-commitments in this supply, so the outlook is pretty positive.”

The trust has already secured renewals for more than 20 per cent of leases expiring in 2010.

Source : Channel NewsAsia – 20 Jan 2010