CapitaCommercial Trust (CCT) reported 2Q15 distributable income and net property income of S$64.4m and S$53.9m which increased 0.5% and 3.6% YoY, respectively. Distribution per unit (DPU) for the quarter is announced to be an estimated 2.19 S-cents, and 1H15 DPU cumulates to 4.31 S-cents which increased 2.1% YoY.

We judge this set of results to be within expectations, as distributable income and net property income from the quarter forms 49.0% and 47.4% of our full year forecast, respectively. In terms of the topline, the trust’s 2Q15 revenues similarly increased 5.0% YoY to S$69.1m mostly due to higher rentals and occupancy rates across its office portfolio

Including the newly completed CapitaGreen, the trust reports an overall occupancy rate of 98.0% and positive rental reversion trends for its Grade A office leases committed over the quarter (average portfolio rental up 1.1% QoQ to S$8.88 psf). We will meet with management regarding this latest set of results and, in the meantime, maintain HOLD with our fair value estimate of S$1.67 under review.

Source: OCBC Research - 24 Jul 2015