We are driven by our mission to deliver long-term sustainable distribution and total returns to Unitholders. To achieve this desired outcome, we proactively endeavor to manage, leverage and harness capital resources available to us. These resources include:
Financial Capital – proactive management of financial capital through proactive portfolio reconstitution including asset management, investments and divestments, and capital management. In 2018, to widen sustainable avenues for future growth, CCT made its first investment outside of Asia. CCT is committed to remain predominantly in Singapore with up to 20% of our portfolio property value overseas over time. We also took decisive action to manage our average cost of debt by extending maturities and increasing the ratio of fixed to floating rate debt.
Organisational Capital – leveraging on a strong corporate governance and enterprise risk management framework, we continuously identify, review, monitor and take appropriate measures to address risks and adhere to the highest code of business conduct. As wholly owned subsidiaries of CapitaLand, the Manager and Property Managers of CCT are committed to sustainability and firmly embrace CapitaLand's core values of Respect, Integrity, Creativity and Excellence. CCT's Board oversight is affirmed in the Board Statement within this annual report.
Human, Social and Relationship Capitals - motivating our stakeholders and communities to buy into our vision and mission and give back to the larger community. Highlights of these are shared below.
Indicators of our sustainable efforts include the positive results that CCT delivered in FY 2018. Gross revenue and net property income rose by 16.7% and 18.5% respectively YoY. FY 2018 distributable income of S$321.7 million was 11.4% higher YoY, while the DPU of 8.70 cents was 0.5% above FY 2017 DPU. Portfolio committed occupancy was 99.4% and our tenant retention rate was 77% as at 31 December 2018. Other indicators to highlight are our initiatives to motivate and engage stakeholders, efforts to enhance operational efficiency, develop new products and services to meet evolving occupants' needs and our efforts to establish and track performance targets and processes to ensure focus and continuous improvement.
Leveraging Technology For Efficiency
Through an Environmental Tracking System (ETS), energy and water consumption are recorded and actively managed across our properties. Comparing 2018 performance to base year 2008, our Singapore portfolio achieved reduction of 27.3% and 26.9% for energy intensity measured in kWh per m2 and water intensity measured in m3 per m2, respectively.
In 2H 2018, CapitaLand rolled out an Intelligent Building Platform (IBP) at select properties. Utilising equipment and video analytics, the platform collects data, analyses the performance of building systems and provides automatic alerts so as to enhance security surveillance and emergency response, detect equipment faults and optimise building systems to improve electricity and airconditioning chilled water consumption. We will closely monitor the progress of this initiative before rolling it out to our other properties in Singapore.
Stakeholders were engaged through various channels throughout the year. We met with about 300 investors, both existing and potential, participated in numerous retail investment forums and conducted property familiarisation visits to provide timely updates and communicate our strategy and plans.
To connect with our tenants and their employees, health & wellness and philanthropic activities were organized throughout the year. Wellness Week was a new initiative to promote wellness in our Singapore workplace communities, with activities ranging from workshops to talks and seminars, workout sessions and F&B deals.
Gifts of Joy was the other highlight for our Singapore office tenants. Gift donations by tenants from six CCT properties were wrapped and gifted to fulfil the wishes of 779 special needs students from the Rainbow Centre. In addition, an art jamming session was organised with students of Rainbow Centre and friends from our tenant community to bring smiles and build awareness.
We have been using these engagements to conduct surveys and gather feedback from part of our continuous improvement process.
New Flexible Spaces
CapitaLand's 'office of the future' strategy to meet the evolving workspace needs of our occupiers/partners and developing an ecosystem of innovative workspace solutions is being piloted at Capital Tower and Asia Square Tower 2. The strategy entails the integration of conventional offices (core) and flexible space (flex) to create core-flex offerings to meet evolving business space requirements, underpinned by community-driven and tech-enabled workspace solutions.
Ongoing Sustainability Journey
We are committed to the long-term success of our sustainability journey. It is about the way we nuture our people, build communities, curate our environment, grow our portfolio and shape our future. We are grateful to all stakeholders who have taken time to support our sustainability programmes over the years. Your continued participation in these activities would be a source of motivation for us to do even more.
Chief Executive Officer
CapitaLand Commercial Trust Management Limited
(as Manager of CCT)
Click here to view full Sustainability Report