The manager of CapitaLand Commercial Trust (CCT) has reported a distribution per unit (DPU) of 1.69 cents for 2Q20 ended June.
This translates to a 23.2% fall from the DPU of 2.20 cents registered in 2Q19.
Distributable income for the quarter fell 20.4% y-o-y to $65.6 million due to lower income from properties in Singapore that were affected by upgrading works, lower occupancies, and rental waivers of $2.3 million to tenants. This was partially offset by contributions from Main Airport Center that was acquired in September 2019.
Quarter on quarter, distributable income rose 3% as it included the $6.4 million of taxable distributable income retained in 1Q20, and $4.7 million of tax-exempt income.
CCT also registered partial contributions from 21 Collyer Quay due to HSBC’s expired lease on April 30, and zero revenue from Bugis Village due to Singapore Land Authority (SLA)’s expired lease on March 31 for the quarter.
In 1H20, CCT’s DPU fell 24.1% y-o-y to 3.34 cents. Distributable income for 1H20 fell 21.7% y-o-y to $129.3 million. This translates to a distribution yield of 3.8% based on CCT’s closing price per unit of $1.76 on Wednesday (July 22).
Gross revenue for 2Q20 fell 8.1% y-o-y to $92.8 million largely due to the lower occupancies and turnover rent, as well as rental waivers to tenants of some $4.4 million from RCS Trust. Revenue from OGS also included a rental waiver of $0.2 million.
Consequently, this led to lower net property income (NPI), which fell 9.7% y-o-y to $70.8 million.
2Q20 property operating expenses dipped slightly at 2.5% y-o-y to $22.0 million, as there were no rental payments to SLA for Bugis Village. The decrease was offset by the acquisition of MAC Co that was acquired in September 2019.
Trust and other operating expenses for the quarter increased 12.4% y-o-y to $1.6 million due to higher professional fees incurred.
As at June 30, CCT’s portfolio occupancy stood at 95.2%. In 2Q20, CCT signed some 176,000 sq ft of new leases and renewals at rental rates, which were mostly higher than the respective expiring rents.
The trust’s aggregate property portfolio value stood at $10.9 billion as at June 30, some 1.7% lower than the appraisal conducted six months ago.
As at end June, cash and cash equivalents stood at $204.3 million.
“CCT’s 2Q 2020 results reflected the impact of our portfolio repositioning and rental support for tenants amidst COVID-19. Retaining and supporting our tenants through the COVID-19 challenges remains a priority for CCT,” says Kevin Chee, Chief Executive Officer of the manager.
“To ensure that our portfolio maintains a sustainable path to future growth, we are focused on completing the asset enhancements of Six Battery Road and 21 Collyer Quay as well as the development of CapitaSpring in 2021,” he adds.
Looking ahead, CCT says the business and operating environment and prospects of the office continue to be affected due to the uncertain outlook.
Unitholders can expect to receive their dividends on August 28.
Units in CCT closed flat at $1.76 on Wednesday.