CapitaLand Commercial Trust: OCBC Investment 2020-01-24: Big Is Better

CAPITALAND COMMERCIAL TRUST (SGX:C61U) | SGinvestors.io CAPITALAND COMMERCIAL TRUST (SGX:C61U)

CapitaLand Commercial Trust - Big Is Better




4Q19 results within our expectations



Rental reversions still largely positive

  • CapitaLand Commercial Trust’s rental reversions remained largely robust, with the exception of Asia Square Tower 2 (AST2), which saw negative rental reversions. To put things in perspective, committed rents (psf/month basis) at AST2, Six Battery Road (6BR), CapitaGreen and Raffles City Tower were S$11.50-S$12.00, S$11.90- S$14.00, S$11.00-S$12.60 and S$9.20-S$11.00, versus average expired rents of S$12.69, S$11.67, S$9.83 and S$9.07, respectively.
  • Looking ahead, although core Grade A CBD office rents appear to be peaking, we note that CapitaLand Commercial Trust’s average expiring rent of S$9.43 psf/month in FY20 is still at a significant level below current market rents of ~S$11.55 psf/month.
  • In terms of portfolio valuation, there was a mild compression in cap rates by 5 bps across its properties as compared to end-2Q19, with the exception of Raffles City Singapore’s retail and hotel components (unchanged). A revaluation gain of S$94.7m was thus recorded in FY19.


Proposed merger with CapitaLand Mall Trust






OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2020-01-24
SGX Stock Analyst Report ACCEPT OFFER MAINTAIN SELL 1.95 UP 1.920



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