CapitaLand Commercial Trust (CCT) reported 3Q15 distributable income and net property income of S$63.2m and S$52.7m which increased 2.6% and 1.5% YoY, respectively. Distribution per unit (DPU) for the quarter is announced to be an estimated 2.14 S-cents (9M15: 6.45 S-cents), and based on the last closing price of S$1.435, CCT’s distribution yield is 6.0%. We judge this set of results to be within expectations, as distributable income and net property income from the quarter formed 77.8% and 74.9% of our full year forecast, respectively.

In terms of the topline, the trust’s 3Q15 revenues increased 2.9% YoY to S$68.3m mostly due to higher rentals across the portfolio except at Golden Shoe Car Park. Including the newly completed CapitaGreen, the trust reports an overall occupancy rate of 96.4% and monthly average rents of CCT’s portfolio ticked up QoQ marginally from S$8.88 psf to S$8.89 psf. We will meet with management regarding this latest set of results and, in the meantime, maintain HOLD but place our fair value estimate of S$1.39 under review.

Source: OCBC Research - 28 Oct 2015