COMMERCIAL PROPERTY | Staff Reporter, Singapore

Here’s why the incoming supply surge won’t faze CapitaLand Commercial Trust

About 4.3m sqft of commercial space will come on-stream this year.

An influx of commercial space is coming on-stream this year, including Marina One, Guoco Tower, and DUO, and CapitaLand Commercial Trust may be getting some help from its expiry profile.

According to analysts from UOB Kay Hian, its well-spread out expiry profile is going to help as incoming supply hits.

“About 10% and 12% of office leases by NLA are due to expire in 2016 and 2017 respectively,” UOB Kay Hian said.

Meanwhile, UOB Kay Hian said ample debt headroom implies minimal risk of dilutive equity fund raising.

“Current gearing of 29.5% gives rise to estimated debt headroom of about S$1.3b (40% gearing assumed). Substantial debt due this year (27% of total debt) is largely attributable to the debt pertaining to Raffles City, and management has highlighted ongoing negotiations with its JV partner CMT,” UOB Kay Hian said.

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