Capitaland Commercial Trust's 4.3% Dividend Yield Is At Historic Low



Key Highlights:

  • Capitaland Commercial Trust's (SGX:C61U) 3Q19 DPU was flat at 2.2 cents

  • The annualised yield and price to book ratio are 4.3% and 1.13 respectively



1. Dividends


Net property income and distribution income grew 0.9% and 2.6% to $81.1m and $84.8m respectively. The increase was mainly due to higher contributions from 21 Collyer Quay, Asia Tower 2, Capital Tower and Gallileo. However, the increase in income was offset by divestment of Twenty Anson and lower contributions from Six Battery Road and Bugis Village.


The annualised yield is 4.3%. It is currently trading at its historical low yield.




2. Portfolio


Portfolio occupancy went down slightly to 97.6%. After the acquisition of Main Airport Center, the leverage ratio was up to 35.5%. The interest cost is 2.5%, with 92% of the loans are on fixed rates. It is currently trading at a price to book ratio of 1.13.

3. Growth catalyst


There will be few ongoing asset enhancement initiatives:

  • Six Battery Road will be fully competed in 3Q2021

  • 21 Collyer Quay will be completed by 4Q2020

  • New asset CapitaSpring will be completed in Q22021

Summary


The DPU is likely to remain flat for the next few quarters. With a current yield of 4.3%, we think the REIT is unattractive at current price.


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