CapitaCommercial Trust (CCT) said higher revenue and lower interest expenses have pushed its second quarter distributable income up 1.9 per cent on-year to S$59.6 million.
Meanwhile, CCT’s distribution per unit (DPU) rose 0.5 per cent on-year to 2.07 cents per unit.
The real estate trust’s gross revenue also grew in Q2, up 1.8 per cent on-year to S$97.5 million.
CCT’s new and renewed Grade A properties now average S$9.93 a square foot, compared to the industry Grade A average of S$9.55 per square foot.
Lynette Leong, Chief Executive Officer of the Manager, said in a statement, “Overall, CCT’s average committed rent for the office portfolio continued to increase in 2Q 2013 from S$7.83 per square foot per month to S$7.96 per square foot per month as a result of the cumulative positive rent reversions from leases signed.”
The trust’s occupancy rate of its entire portfolio also rose in the second quarter to 95.8 per cent, up from 5.3 per cent in Q1.
The firm said the occupancy rate in Singapore’s core Central Business District rose from 93.2 per cent to 95.1 per cent.
The occupancy rate of properties at Six Battery Road rose to 94.2 per cent in Q2 from 93.2 per cent in Q1.
For properties at One George Street, the occupancy rate increased from 94.4 per cent to 97.2 per cent.
CCT said its growth results were helped by a savings from lower interest cost. It has a low gearing of 28.9 per cent and an average cost of debt at 2.8 per cent per annum.
It added that 76 per cent of its total borrowings are on fixed interest rates, thereby minimising the impact of any interest rate increases.
Meanwhile, the trust will be investing S$40 million to upgrade Capital Tower along Robinson Road to maintain its position as a premium Grade A office tower.
CCT expects demand for office space to remain healthy as large occupiers make their way back to the market.
Ms Leong, said: “The large occupiers are now evaluating options and they will come back but they may take a longer time to decide. The supply is going to be very limited over the next five years. Much of the supply is coming towards the end of the five years and the next three years is going to be very tight. We have already seen rents recovering. We have already seen the bottom of the cycle and it is just upwards only from here on.”
Source : Channel NewsAsia – 17 July 2013