Contributions from recently acquired properties help push DPU up 25%
By UMA SHANKARI
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CAPITACOMMERCIAL Trust (CCT) said yesterday that its first-quarter distributable income rose 27 per cent to $45.4 million - from $35.9 million previously - on contributions from recently acquired properties One George Street and Wilkie Edge.
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Distribution per unit (DPU) rose 25 per cent to 3.24 cents, from 2.59 cents in Q1 2008.
CCT secured a three-year term loan facility of up to $160 million during the quarter.
The loan, secured against HSBC Building and with an all-in margin of 3 per cent per year, will be used to repay the trust's $156 million short-term loan maturing in June.
With this, CCT has no more refinancing requirements for this year.
The trust also said that its three-year secured term loan to refinance $580 million of commercial mortgage-backed securities (CMBs) due in March 2009, which it announced in January, has been fully drawn down to repay the CMBs.
CCT's gearing stood at 38.3 per cent in Q1.
The office trust, partly owned by Singapore's largest developer CapitaLand, saw net property income grow 41 per cent to $69.9 million in Q1 on income contributions from properties acquired during the past year, as well as higher rental contributions from other office properties in its portfolio.
In the first four months of this year, CCT signed new or renewed leases for an aggregate area of about 335,800 sq ft.
Rental reversion remains positive on a weighted average basis at about 49 per cent higher than previous rents, the trust said.
Occupancy is also healthy - CCT's portfolio committed occupancy was 97.7 per cent as of yesterday.
Despite these encouraging signs, the trust expects 2009 to be a difficult year.
'We have also been actively working on renewing tenants' leases way ahead of their expiry dates,' said Richard Hale, chairman of the trust's manager.
'As a result, 89 per cent of our forecast gross rental income for 2009 had been locked-in under committed leases as at March 31, 2009. Nonetheless, 2009 is still expected to be a challenging year.'
CCT reiterated that it is committed to paying 100 per cent of its distributable income for the financial year ending 2009.
Analysts are positive on CCT's Q1 results but warned that equity raising could be on the cards.
'CCT is our preferred office pick at a 15.8 per cent yield, though we think there is a risk of equity issuance in the next six to nine months to bring gearing down ahead of expected falls when assets are revalued at the end of this year,' Macquarie Research analysts Tuck Yin Soong and Elaine Cheong said in a note yesterday.
Macquarie has an 'outperform' call on the stock.
CCT gained four cents, or 4.9 per cent, to close at 85.5 cents yesterday.
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