CCT gets S$9.3m in yield protection for One George Street

CapitaCommercial Trust (CCT) will receive a total of S$9.3 million from Capitaland Commercial Limited (CCL).

The money for the year ended 31 December 2009 is the yield protection amount in relation to the property, One George Street.

CCT had bought the asset from CCL and under the terms of the deal, CCL agreed to provide a yield protection to CCT if it falls below a certain amount. As the net property income for One George Street for 2009 was less than the amount, CCL will make up the shortfall of S$9.3 million.

CCT said the shortfall in the net property income is due to lower operating performance as a result of the global economic slowdown.

Low rental rates for some existing leases that have not expired also led to the shortfall.

Moreover, CCT reported on Wednesday that its fourth quarter distribution per unit (DPU) stood at 1.88 Singapore cents.

After adjusting for a rights issue launched last year, the DPU is 38.2 per cent higher than the 1.36 Singapore cents DPU announced over the same period a year ago.

Distributable income for the fourth quarter jumped 39.3 per cent to S$52.9 million, up from the previous year’s figure of S$37.9 million.

For the full year, CCT’s DPU gained 28.8 per cent on-year to 7.06 Singapore cents, after adjusting for the rights issue. Its distributable income for 2009 was up 29.7 per cent on-year to S$198.5 million.

CCT said it saw higher revenue in the fourth quarter mainly due to higher rental income from positive rent reversions. A full period impact from the acquisition of Wilkie Edge in December 2008 also boosted earnings.

In addition, property operating expenses dropped in the fourth quarter, on lower property taxes, utilities and marketing expenses.

CCT also announced on Wednesday that it is selling one of its assets, Robinson Point, to a private fund managed by AEW Asia for S$203.25 million. At that price, it is 11.4 per cent above the property’s valuation as at 31 December 2009.

CCT is also reviewing its plans for Starhub Centre at Cuppage Road. It said outline planning permission has been obtained from the Urban Redevelopment Authority (URA) to change the use of the property.

URA has given the go-ahead for Starhub Centre to be changed from a commercial, to a mixed residential and commercial development. The change of use is still subject to other government authorities’ approval.

Going forward, CCT said it will continue its proactive asset management activities combined with prudent capital management.

Source : Channel NewsAsia – 20 Jan 2010

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