Capitaland Commercial Trust DPU Fell 25 Percent In 1Q2020

CapitaGreen

Capitaland Commercial Trust had released their 1Q2020 financial results on 29th April 2020.

Gross revenue increased by 3.8% to S$103.6 million. This was largely attributed to contributions from Main Airport Center which was acquired in September 2019 as well as higher revenue at 21 Collyer Quay, Gallileo and CapitaGreen.

Property operating expenses increased by 16.6% from S$20 million in 1Q2019 to S$23.3 million in 1Q2020. This was due to the addition of Main Airport Center and Bugis Village’s rental payable under the master lease with SLA.

Similar to other REITs, Capitaland Commercial Trust is also retaining capital due to uncertainty caused by the COVID-19 pandemic. This had caused the distributable amount to decrease by 23% as compared to 1Q2019.

A Distribution Per Unit (“DPU”) of 1.65 cents was declared. This is a decline of 25% as compared to 2.20 cents paid out in 1Q2019.

1Q2020 Financial Results

1Q2020
(S$’mil)
1Q2019
(S$’mil)
YoY(%)
Gross Revenue 103.6 99.8 3.8%
Net Property Income 80.3 79.8 0.7%
Distributable Amount (Before Capital Retention) 70.2 82.7 (15.2)%
Distributable Amount (After Capital Retention) 63.7 82.7 (23.0)%
Distribution Per Unit (“DPU”) (cents) 1.65 2.20 (25.0)%

Occupancy

The total portfolio occupancy for Singapore and Germany stood at 95.2%.

CapitaGreen’s lower occupancy was due to the downsizing of a tenant pre-COVID-19.

Six Battery Road’s occupancy decline due to expiry of Standard Chartered’s lease in January 2020 and start of asset enhancement initiative.

Raffles City’s office occupancy is at 92.2% due to downsizing of a tenant with lease expiring after 31 December 2019, while retail occupancy is at 98.5%.

Capitaland Commercial Trust DPU Fell 25 Percent In 1Q2020

Debt

Gearing ratio stood at 35.5% with S$600 million green loans obtained. This increased the percentage of sustainability funding.

Capitaland Commercial Trust DPU Fell 25 Percent In 1Q2020

Current Dividend Yield

Based on a total of 8.88 cents paid out in 2019 and the current share price of S$1.54, this translate to a current dividend yield of 5.77%. This is slightly unattractive to me as I am expecting office REITs to have a dividend yield of above 6%.

Since the dividend for 1Q2020 is cut, I believe the estimated yield is even lower than the current.

Capitaland Commercial Trust DPU Fell 25 Percent In 1Q2020

Summary

I like Capitaland Commercial Trust for its quality Grade A office assets. The current dividend falls below my expectations as I will expect an office REIT to provide a dividend yield of 6% or more. If I were to buy into Capitaland Commercial Trust, I will wait for the share price to decline further before buying.

If you are not aware, Capitaland Commercial Trust is merging with Capitaland Mall Trust. Since I already own Capitaland Mall Trust, I am less interested to buy into Capitaland Commercial Trust.

You can read more on the merger between Capitaland Commercial Trust and Capitaland Mall Trust here.

 

Screening For Dividend Stocks In April 2020

Screening For Dividend Stocks In April 2020

Last month, the stock market had crashed due to the impact of COVID-19. Since then, the stock market has started its recovery when news of government from different countries started to provide stimulus budget to revive the economy. During the crisis, I have picked up OCBC Bank, Singtel, US Manulife REIT and added more of CapitaMall Trust when their stock prices fell. If you didn’t know, I am a dividend investor. Thus, I usually look out for stocks with attractive dividend yield that provides me with endless dividends many years ahead. The stock market crash has provided me with such an opportunity.

I will run the Stocks Café stock screener every month which gives me a list of stocks that fulfill my dividend criteria. I fall into the medium risk type of investor and thus I never looked at stocks with dividend yield more than 10%. Below are the criteria that I used to identify dividend stocks.

  • Current Yield (%) >= 5 and <= 10
  • Price / Earnings <=20
  • Price / Book <= 3
  • Market Capitalization >= 1B

Below are the top dividend yielding stocks as of 10th April 2020. I believe you will see some REITs that you have been eyeing for before the stock market had crashed. Even though the stock prices have started the recovery, the current yield is still attractive.

Name Current Yield % P/E P/B Market Cap
Mapletree NAC Trust 9.981 4.44 0.611 2.8B
OUE Commercial REIT 8.711 13.38 0.618 2B
Ascendas-iTrust 8.644 5.29 1.084 1.4B
DBS 7.837 7.65 0.998 48.7B
Frasers Logistics and Industrial Trust 7.568 9.05 0.974 2.1B
CapitaRetail China Trust 7.557 8.46 0.845 1.6B
Frasers Commercial Trust 7.385 7.91 0.794 1.2B
Suntec REIT 7.37 9.21 0.605 3.6B
CapitaMall Trust 7.125 8.89 0.798 6.2B
Ascendas REIT 7.038 17.7 1.29 10.1B
Yanlord Land 6.733 2.97 0.358 2B
ComfortDelgro 6.527 12.25 1.252 3.2B
Frasers Centrepoint Trust 6.275 9.41 0.87 2.2B
UOB 6.197 7.74 0.849 33.4B
SIA Engineering 6.18 10.44 1.29 2B
CapitaCommercial Trust 6.082 12.77 0.784 5.6B
SPH REIT 6.081 11.84 0.786 2.1B
TCIL HK$ 6.044 17.2 0.329 3.7B
SATS 5.938 15.9 2.211 3.6B
OCBC Bank 5.922 7.91 0.863 39.4B
Jardine Cycle & Carriage 5.833 6.71 0.875 8.1B
Mapletree Commercial Trust 5.595 5.45 0.955 5.6B
Yangzijiang Ship Building 5.435 5.9 0.601 3.6B
Guocoland 5.385 5.72 0.374 1.4B
Olam International 5.208 9.01 0.852 4.6B
SPH 5.195 12.19 0.72 2.5B
Frasers Property 5.128 7.32 0.453 3.4B
Lonza 5.042 5.72 0.659 5.9B

Last, I just want to mention again that the above list is for reference only and we should do our homework before buying into the stock simply for the dividend yield.