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OCBC Investment Research has downgraded CapitaCommercial Trust (CCT) to a "sell" on valuation grounds, but kept fair value estimate unchanged at S$1.67 a unit following the release of the trust's fourth quarter 2014 results.
CCT reported fourth quarter 2014 distributable income and net property income of S$63.6 million and S$50.6 million, up 5.7 per cent and 3.0 per cent year-on-year, respectively. Distribution per unit (DPU) for the quarter is an estimated 2.15 Singapore cents versus 2.09 Singapore cents the previous year.
"We judge this set of results to be within expectations, as FY14 distributable income and net property income form 102.7% and 100.4% of our full year forecasts, respectively,'' OCBC's analysts said.
Excluding the newly completed CapitaGreen, the trust reported a healthy overall occupancy rate of 99.4 per cent and positive rental reversions for its Grade A office leases committed over the quarter.
The analysts noted that the trust has a debt headroom of S$1.3 billion assuming a 40 per cent gearing, and is holding a call option to buy the 60 per cent remaining interest in CapitaGreen from 2015-17.
At 10.43am on Thursday, CCT was trading around S$1.87 a unit, down three cents, or 1.5 per cent.