CapitaLand Commercial Trust (CCT) reported 4Q15 distributable income and net property income of S$64.1m and S$52.3m which increased 0.8% and 3.2% YoY, respectively. Distribution per unit (DPU) for the year is an estimated 8.62 S-cents (up 1.9% YoY), and based on the last closing price of S$1.365, CCT’s distribution yield is 6.3%.

We judge this set of results to be within expectations, as FY15 distributable income and net property income forms 104.0% and 99.3% of our full year forecast, respectively. In terms of the topline, the trust’s 4Q15 revenues increased 1.9% YoY to S$67.6m mostly due to higher rents and portfolio occupancy.

Including CapitaGreen, the trust reported an overall occupancy rate of 97.1% and monthly average rents of CCT’s portfolio ticked up QoQ marginally from S$8.89 psf to S$8.90 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$1.39 under review.

Source: OCBC Research - 20 Jan 2016