Resilient CapitaGreen shields CCT as office rents slide

But other properties will suffer lower occupancy.

CapitaCommercial Trust can rely on CapitaGreen to keep its earnings stable despite the unabated drop in overall office rents, according to a report by DBS.

"CCT offers investors greater earnings certainty in the form of additional contribution from CapitaGreen. This should help offset the potential risk of negative rental reversions and
lower occupancies for the rest of the portfolio in the next few years," DBS said in a report.

CapitaGreen has achieved commitments for 92.8% of its net lettable area as of 1Q16. Majority of leases secured at the property will expire beyond 2018, which DBS said will protect the asset from the anticipated spike in office supply from 2016-2018.

"While leases signed in 2014 have begun operations, we note that most tenants who signed their leases in 2015 will likely begin to contribute gradually from 1Q16 onwards. Full year contribution from FY17 will add another visible boost to DPU in the medium term," DBS said.