, Singapore

CCT's growth hinges on recent purchase of CapitaGreen amidst tough times

It is projected to help CCT achieve DPU CAGR of 4%.

Despite the expected decline in the office market, DBS Vickers Securities believes the timely acquisition of the remaining 60% in CapitaGreen not only helps to offset potential negative rental reversions and lower occupancies for the rest of CapitaLand Commercial Trust (CCT)’s portfolio but will allow CCT to deliver a DPU CAGR of 4% from 2015-2017.

According to the research firm, the estimate, which excludes impact from redevelopment of Golden Shoe, is among the highest in the office sector (average of 2%) and above the S-REIT DPU CAGR of 1%.

"Beyond the boost from the higher equity interest in CapitaGreen (40% previously to 100%), CCT should benefit from the higher underlying earnings at CapitaGreen as tenants progressively move into the building and rent-free periods start to expire," it said in a report.

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