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• Step-up rentals
As at 31 December 2003, a total of 45.4 percent
or 437 tenants are on the step-up rental structure. The yearly
rental increments which have been built into these leases
will serve to provide intrinsic annual rental increases of
2 to 4 percent.
• Improved rental rates
Rental rates for the new leases concluded in 2003
reflect a 6.2 percent increase from the forecast rentals.
With the improved rental rates in place and step-up rentals
providing intrinsic growth, CMT has established a platform
for growth in future years.
- Forecast rent for the period from 1 January to 25 June
2003 is based on the assumptions in the CMT offering circular
dated 28 June 2002 and the forecast rent for the period
from 26 June to 31 December 2003 is based on the assumptions
in the CMT circular dated 11 June 2003.
- IMM Building was acquired on 26 June
2003. Forecast rent for the period from 26 June to 31 December
2003 is based on the assumptions in the CMT circular dated
11 June 2003.
• Asset enhancements
Apart from the intrinsic growth brought about
by the step-up leases, CMT has further demonstrated that deliberate
asset planning can enhance the value of net lettable area
(NLA) at the malls to further propel growth. Through innovative
asset planning, higher yielding retail spaces were created
within the Gross Floor Area (GFA) constraint.
Tampines Mall
8,202 square feet of retail areas on level 4 were decanted (removed),
and transferred to the ground level to create new shops and food
& beverage outlets with an alfresco dining area. The new retail
areas command better rental values of more than three times the
average rental rates at the foregoing space on level 4. All new
tenants have commenced trading since December 2003.
An approximate S$5.9 million was spent on this
and the Manager expects an increase of S$1.1 million in Net
Property Income (NPI) per year.
Before - Uncovered walkway |
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After - Covered walkway with an alfresco dining area |
Junction 8
Earlier in the year, a 36 percent improvement in rental rates was
achieved for the area once occupied by SAFE Superstore. Without
losing the electrical and home appliances element, the space on
level 4 was split into smaller units to accommodate a wider variety
of tenants at higher rental rates.
Besides this, approximately 75,000 square feet
of office space GFA, generating an average rent of S$3.50
per square foot per month, will be decanted and transferred
to the lower levels of basement 1, and levels 1 and 2 as retail
space. The new retail areas will command more than three times
the average rental rates paid by office tenants previously.
Phase 1 of the above asset enhancement works has
been completed with higher yielding retail space created in
basement 1. This includes food kiosks which neatly complement
the supermarket and food outlets in operation on that level.
All new tenants on basement 1 have commenced operations since
December 2003.
Under Phase 2, more retail NLA will be created
on levels 1 and 2 of the mall. This is currently in progress
and is expected to be completed by end 2004.
An approximate S$27.7 million will be spent on
these works and the Manager expects an estimated increase
of S$3.9 million in net property income per year upon completion.
- GFA to be decanted or reconfigured from the office tower
and levels 1, 2 and 3 of the retail podium as at 31 December
2003.
- Newly configured or created net lettable area on basement
1, and levels 1 and 2 after the completion of asset enhancement
works scheduled for completion by end 2004.
Note: Based on Manager’s estimate
Before - Basement 1 carpark space...... |
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... converted to food kiosks. |
• Non-rental income or "other income"
| This has been a major component of CMT’s
growth. For the financial year 2003, non-rental income
contributed 8.4 percent to gross revenue. This includes
income from carparks, vending machines, casual leasing,
services provided at customer service counters, advertisement
panel spaces, etc. CMT will continue to explore new avenues
for growth in this area. We believe there is room to further
develop this revenue component. |
Vending machines and pillar wraps -
a major component of non-rental income. |
- Excludes non-rental income from IMM.
- Includes non-rental income from IMM, which was acquired
on 26 June 2003.
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