CCT's net income up 35.4% to $70.7m in Q4

CapitaGreen's contribution finally kicked-in.

CapitaLand Commercial Trust Management announced that CCT recorded higher net income in 4Q16 compared to a year ago, which translated into a 10.1% increase in distribution per unit of 2.39 cents.

Meanwhile, gross revenue increased by 32.7% to $89.7m. and net property income (NPI) grew by 35.4% to $70.8m. This is a result of CapitaGreen’s contribution to CCT’s 4Q 2016 gross revenue and NPI after becoming a wholly-owned property of the Trust. It in turn arose from CCT’s acquisition of the remaining 60.0% interest in MSO Trust that owns CapitaGreen which completed on 31 August 2016.

The Trust’s investment properties, including its joint venture interest in Raffles City Singapore, have been assessed by independent valuers to be worth $8,491.9m as at December 2016. This represents a 13.6% y-o-y increase in portfolio value mainly due to the increased stake in MSO Trust. The Trust’s adjusted net asset value per unit is $1.73, after deducting the distributable income payable to unitholders.

CCT Management Chairperson Soo Kok Leng said CCT has delivered a set of credible results for 2016 notwithstanding headwinds in the macroeconomic environment and Singapore office market. This is due to our proactive leasing strategy and acquisition of the remaining 60.0% interest in CapitaGreen.

"The acquisition is a strong testament to the successful execution of our portfolio reconstitution strategy resulting in not only an enhancement of the quality of CCT’s portfolio but also improved financial return. Our proposed redevelopment of Golden Shoe Car Park represents another value creation opportunity which will potentially further strengthen CCT’s foothold and position as the largest office landlord in Singapore’s Central Business District.," Soo said.

Meanwhile, the manager's Chief Executive Officer Lynette Leong said CCT's portfolio committed occupancy rate of 97.1% as of December is driven by expansion of existing tenants and take-up by new tenants.

"About half of 2017 leases have been renewed, and we will continue to proactively attract and retain tenants to mitigate leasing risk. We do not expect to be significantly affected by rising interest rates given that about 80.0% of CCT’s borrowings are on fixed interest rates and that it has minimal debt due for refinancing in 2017," she noted.

"Beyond the current challenging market conditions, we are looking at the next wave of the office market upcycle as well as “the future of work” – that is, how the way people work will possibly evolve in the future given the trend of globalisation, mobility and digital technology – and incorporate that in our evaluation of the financial feasibility of the redevelopment of Golden Shoe Car Park, while seeking approvals from the government authorities. Our wish is to replicate the success of CapitaGreen so as to spark a new growth catalyst for the Trust.," she added.