CapitaCommercial Trust (CCT) reported 4Q14 distributable income and net property income of S$63.6m and S$50.6m which increased 5.7% and 3.0% YoY, respectively. Distribution per unit for the quarter is announced to be an estimated 2.15 S-cents, up 2.9% versus 2.09 S-cents for 4Q13. We judge this set of results to be within expectations, as FY14 distributable income and net property income forms 102.7% and 100.4% of our full year forecast, respectively.

In terms of the topline, the trust’s 4Q14 revenue similarly increased 3.1% YoY to S$66.4m mostly due to higher rentals and occupancy rates across its office portfolio. Excluding the newly completed CapitaGreen, the trust reports a healthy overall occupancy rate of 99.4% and continued positive rental reversion trends for its Grade A office leases committed over the quarter. CapitaGreen is now 69.3% committed, above the trust’s target occupancy of 50%, after having achieved TOP status on 18 Dec 2014.

We will have an analyst briefing later today and, in the meantime, maintain HOLD with our fair value estimate of S$1.67 under review.

Source: OCBC Research - 21 Jan 2015