CapitaMall Trust (CMT), which has a portfolio of 16 malls in Singapore, said yesterday that asset enhancement initiatives would be a major growth driver for the real estate investment trust.
For The Atrium@Orchard, CMT will separate three levels of office space totalling 127,000 sq ft and combine this with Plaza Singapura to create a single entity with a net lettable area of about 625,000 sq ft.
The construction, set to be completed by the end of next year, will make it the second-largest mall on Orchard Road, behind only ION Orchard.
The enhancement is expected to cost S$150 million, CMT said.
Enhancement work will also be done on Junction 8 and Iluma, with improvements including a new facade with an LED screen and a glass canopy for more alfresco dining.
These will cost between S$20 million and S$30 million for Junction 8 and S$30 million to S$40 million for Iluma.
Mr Simon Ho, CEO of the trust manager, said: “These initiatives are expected to strengthen the competitive edge of the respective malls and bolster CMT’s DPU (distribution per unit) growth for the next few years.”
Mr Ho was speaking at a briefing on CMT’s second-quarter financial results. For the quarter, DPU rose 3.1 per cent to 2.36 cents from the 2.29 cents reported in the same period a year ago. This was attributed to higher rental rates secured from new and renewed leases.
Mr James Koh, chairman of the trust manager, said that revenue growth was also driven by contributions from Clarke Quay and Iluma which were acquired on July 1, 2010 and April 1, 2011, respectively.
Net property income for the quarter ended June was up by 7.7 per cent year-on-year to S$106.4 million.
Gross revenue grew 12 per cent year-on-year to S$159.6 million in the second quarter.
For the first half of the year, CMT said it renewed 269 leases with a positive growth of 7.8 per cent over preceding rental rates contracted three years ago. CMT’s portfolio registered almost full occupancy at 98.1 per cent as of end-June.
Source : Today – 20 Jul 2011