CCT

CCT: 1Q13 results below Deutsche’s expectations. DPU at 1.96 cts, +3.2% yoy, -4.4% qoq, mainly due to higher retained income of $2.7m. Revenue rose 10.2% yoy, driven by HSBC Building and contribution from 20 Anson, while NPI rose 7.1% on higher opex. Overall occupancy fell from 97.2% to 95.3% due to relocation of Cisco from Capital Tower. CCT lease/ renewed 409.9k sf of space in 1Q, of which 12% were new lewases with avg passing rents +2.5% to $7.83 on positive reversions. New demand was broad-based denominated by manufacturing & distribution and business consultancy, IT & telco. The $92m AEI at 6 Battery Road is on schedule to complete end year, while Raffles City AEI will be carried out in phases till 2Q14. Deutsche notes valuations are undemanding at 1.03x P/B and FY13e yield of 4.7%, implying 330 bps spread (vs LT avg of 325 bps). Tips completion of CapitaGreen end next yr as catalyst to boost FY15e DPUs. Maintains Buy with TP $1.78.