Thursday, 23 April 2015

CapitaCommercial Trust

UOBKayhian on 23 Apr 2015

FY15F PE (x): 18.8
FY16F PE (x): 17.1

Results in line with expectations. CapitaCommercial Trust (CCT) reported 1QFY15 DPU of 2.12 cents, up 3.9% yoy, supported by positive rent reversions and improved occupancies across its portfolio. Results were in line with our expectations, accounting for 24.7% of our full-year DPU estimate of 8.6 cents. Securing 76.4% pre-commitment for CapitaGreen (4Q14: 69% 3Q14: 40%, 2Q14:23%) and targeting full occupancy by end-15. Capitagreen achieved rents in the S$12-16psf pm range during the quarter. Tenants span diverse sectors, including financial services, insurance, commodities, legal, technology, real estate, health and fitness, and food & beverage. Management highlighted that insurance companies took the lion’s share of committed office space. In what may seem to be a developing trend, firms in the technology, media and telecommunications (TMT) sector have taken up a significant portion of committed office space. Maintain BUY and target price of S$2.05, based on DDM (required rate of return: 7.2%, terminal growth: 2.2%).

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