CCT's distributable income for first nine months in 2010 up 14.2%

Distributable income in the first nine months of 2010 increased by 14.2% to S$166.3 million from S$145.6 million during the same period last year, according to CapitaCommercial Trust Management Limited (CCTML).

In a statement, CCTML, the manager of CapitaCommercial Trust (CCT or Trust), said the distributable income in 3Q 2010 also increased by 7.9% to S$56.2 million from S$52.1 million during the same period last year.

The year-to-date distribution per unit (DPU) is 5.89 cents, which is 13.7% higher than last year’s DPU of 5.18 cents. The 3Q 2010 distribution per unit (DPU) achieved is 1.99 cents, a 7.6% increase from 3Q 2009 DPU of 1.85 cents.

The Trust’s distribution yield is 5.5% based on 3Q 2010 DPU and the closing price of S$1.44 per unit on 20 October 2010. There is no distribution payment this quarter as the Trust distributes semi-annually.

Lower property tax and interest savings as a result of lower borrowings contributed to the Trust’s strong distributable income growth in 3Q 2010 and YTD 2010. There is minimal change in gross revenue between YTD 2010 and YTD 2009 notwithstanding the loss of rental income following the Trust’s divestments of Robinson Point and Starhub Centre in April and September 2010 respectively.

Mr. Richard Hale, Chairman of the Manager, said, “CapitaCommercial Trust continues to deliver steady distributable income, up 7.9% to S$56.2 million this quarter. Although the year-to-date gross revenue is flat, we still achieved higher net property income due to operating efficiencies. We have unlocked significant value for the Trust from the divestments of Robinson Point and Starhub Centre.”

He added that the Trust will continue to extract value from the portfolio through proactive asset enhancement initiatives. We are actively sourcing for good quality assets that will complement our existing portfolio. We will also maintain a disciplined approach towards using the divestment proceeds, with careful consideration to the impact on the Trust’s balance sheet and yield, and unitholders’ returns.”

Ms Lynette Leong, Chief Executive Officer of the Manager, said, “CapitaCommercial Trust’s proactive leasing efforts and high service standards continue to deliver consistently high occupancy rates for its properties. Our Grade A offices registered near 100% occupancy, and our portfolio achieved a rate of 98.2% through attracting new and retaining existing tenants.

She added that the Trust has obtained committed leases which will ensure it achieves at least 98% of last year’s gross rental income by the end of 2010. This is notwithstanding that the Trust has sold Robinson Point and Starhub Centre.

Ms Leong said their portfolio is benefiting from the steady rental recovery of Singapore’s office market post-global financial crisis, with lease renewals by our tenants in banking & financial services and business consultancy sectors showing prominence.

Given Singapore’s healthy economic and tourism growth prospects, she said the Trust’s hotel and retail components, which collectively contribute approximately 32% of the Trust’s gross rental income, will also stand to enjoy positive growth.”

Added Ms Leong, “We have also been keeping interest expenses low and reducing borrowings whenever possible and we have completed all refinancing due in 2010, and are already exploring options to refinance the borrowings due in future years. Maintaining financial flexibility by having a large portfolio of unencumbered assets and reasonably low gearing remains one of our cornerstones of prudent capital management, and yet provides us with the nimbleness to respond to acquisition growth opportunities when they arise.”