Should CCT start racing against the clock to clinch larger tenants?

Over 70% of leases start expiring in FY19.

Timing is on Capitaland Commercial Trust’s (CCT) side, as its defensive lease profile sees the expiry of most of its leases coinciding with an expected upturn in the office market.

According to a report by DBS, stiff competition for larger tenants has done little to faze CCT, as the business has maintained a defensive leasing strategy by clinching longer-term leases for most of its top 10 tenants.

“With >70% of office leases expiring in FY19 and beyond, CCT offers investors a good measure of earnings visibility and stability amid record office completions over the next two years,” DBS states.

“CCT should also benefit when the majority of its leases are renewed post FY19 as the Singapore office market should be on an upturn then, as no new office buildings will be completed from FY18 onwards,” it adds.