SINGAPORE (April 25): The manager of Cambridge Industrial Trust (CIT) has declared a 1Q17 distribution per unit (DPU) of 1.004 cent, a 9.7% decrease from 1.112 cent in the previous year.
Gross revenue for the quarter ended March decreased 2.2% to $27.7 million as a result from the trust’s transition phase of its properties moving from single tenanted to multi-tenanted, while property operating expenses also grew 17.2% to $8 million for the same reasons.
Net property income (NPI) fell 8.4% to $19.7 million, due mainly to the impact of several master leased properties that were converted into multi-tenancy properties in FY16 as well as the impact from recent divestments.
As at end March, CIT has a fully unencumbered portfolio of 49 investment properties with a combined value of approximately $1.35 billion, which the manager says provides maximum operational and financial flexibility.
Its gearing ratio was also within the manager’s target range of 30-40%.
About 17.7% of CIT’s leases are due for renewal in FY17, of which only 3.3%, i.e. 3 properties, are for single-tenanted buildings while 14.4% are for multi-tenanted buildings.
CIT’s manager expects to renew or enter into new leases for two properties and divest a smaller non-core property.
“Looking ahead, pressures on rental terms are expected to continue due to the prolonged soft economic environment and rental market,” comments Adrian Chui, CEO and executive director of the manager.
“Nevertheless, [we] will continue to focus on improving occupancy rates and maximise tenant retention in the current challenging leasing market.”
Units of CIT closed flat at 58 cents on Monday.
