Capitacommercial Trust

Capitacommercial Trust: Leasing activity has picked up over the past 6 months with healthy demand trends. CCT leased/ renewed 409,900 sf of space in 1Q of which 12% were new leases with positive rent reversions. Mgmt is still actively back-filling space and is in negotiations to lease out the remaining space vacated by Cisco in Capital Tower. Mgmt is currently building awareness for CapitaGreen and interest has been strong, although the bulk of leasing activity will likely take place next year- given the expectation of a recovery in rents as Grade A supply falls. Construction is on track for completion by 4Q next year with the basement foundation completed. Income contribution from OGS is expected to fall after the expiry of income support in Jul 13, the impact may be mitigated by positive rent reversions and (ii) interest cost savings from the expiry of income rate swap on $370m of debt (pro-forma avg cost of 2.6% vs. 3% as at 1Q13). DB has a BUY rating, TP of $1.78;