Our priority is to understand the profile of shoppers in our local communities and stay nimble in serving their needs.
CapitaLand Mall Trust (CMT) has maintained its market leadership as Singapore's largest retail REIT in 2018 amidst the challenges of an evolving industry. Keeping our focus on value creation through portfolio reconstitution, proactive asset and capital management, we divested Sembawang Shopping Centre and redeployed the proceeds into the acquisition of the remaining interest in Westgate, a higher yielding quality asset. Thinking outside the box, we continued to ride on innovation and technology to test bed novel retail concepts. Funan's digital blueprint and the launch of NomadX at Plaza Singapura by CapitaLand were among the key initiatives in 2018 that differentiated us as a shopping mall owner who adapts to the evolving retail landscape to stay competitive and deliver sustainable longterm returns to Unitholders.
We are pleased to report the results of another strong financial year in 2018. Distributable income was S$410.7 million for financial year (FY) 2018, an increase of 3.8% over the same period last year. Distribution per Unit was 11.50 cents, 3.0% higher than 2017. This translated to a distribution yield of 5.09% based on CMT's closing price of S$2.260 as at 31 December 2018.
Gross revenue and net property income have risen by 2.2% and 3.2% to S$697.5 million and S$493.5 million respectively in FY 2018. Gross revenue was higher mainly due to the completion of the acquisition of the remaining 70.00% interest in Westgate as well as higher contribution from Plaza Singapura, IMM Building, Tampines Mall, Junction 8 and Bedok Mall. This was partially offset by lower gross revenue from mainly Sembawang Shopping Centre due to its divestment, and lower occupancy from JCube and Bukit Panjang Plaza.
In November, we acquired the remaining 70.00% stake in Westgate for S$789.6 million. With 100% ownership of Westgate, we can now fully capitalise our strengths to capture the long-term growth potential in Jurong Lake District, which is slated to become Singapore's Western Business District.
Westgate's acquisition at an agreed price of S$1,128.0 million, on completed basis, had been preceded by the timely divestment of Sembawang Shopping Centre for S$248.0 million. This is in line with our portfolio reconstitution strategy to redeploy capital into high quality assets with better fundamentals.
Our Funan integrated development achieved structural completion in September 2018, two months ahead of schedule. The opening of the shopping mall in mid-2019 will further enhance our market presence. Including leases under active negotiations, the lease commitment at Funan has reached more than 80.0% as at 31 December 2018.
Two asset enhancement initiatives (AEIs) were undertaken and completed during the year. The S$8.2 million rejuvenation of Tampines Mall involved the construction of a new duplex, enhancement of the mall facade and new flooring for the external walkway. Over at Westgate, refurbishment works to enhance shopper experience included the enclosure of selected alfresco dining outlets with air conditioning, improved shopper access with a new entrance point and escalators connecting Level 1 and 2, as well as increased visibility of shops in Basement 1.
AEIs serve to drive visitor traffic, elevate shopping experiences and create value for our retailers. As at 31 December 2018, CMT's portfolio occupancy of 99.2% remained well above the market average of 92.4% for suburban malls and 94.1% for Orchard Road malls1. We have been proactive in tenant retention and space optimisation. In 2018, we leased and renewed approximately 23.1% of CMT's net lettable area.
We exercise prudence when managing our capital. Despite undertaking the acquisition of the balance 70.00% stake in Westgate this year, CMT's average cost of debt improved to 3.1% from 3.2% last year and aggregate leverage remained at 34.2% as at 31 December 2018.
Refinancing activities in 2018 included S$378.8 million2 fixed rate notes due 2023 and beyond, issued by CMT MTN Pte. Ltd. through its S$3.5 billion Multicurrency Medium Term Note Programme (MTN Programme). HSBC Institutional Trust Services (Singapore) Limited as trustee-manager of RCS Trust also issued S$425.0 million fixed rate notes due 2024 and beyond through its US$2.0 billion Euro- Medium Term Note Programme.
In October, a private placement exercise raised about S$277.6 million. 98.4% of the amount was used to partially finance the acquisition of Westgate's remaining 70.00% stake, with the balance 1.6% used for the placement's transactional expenses.
The growth of omni-channel retailing has presented new opportunities for CMT to support our retailers and increase their consumer touchpoints. The reimagined Funan, for example, features a digital blueprint that integrates technology and automation into the retail setting. Shoppers at this soon-to-complete development will be able to experience the convenience of a 24-hour click-and-collect drive-through facility, efficiency of automated guided vehicles and a robotic arm - a first for shopping malls in Singapore. The mall also houses a variety of open spaces and studios that promote new forms of retail, experimentation and social learning. Conceived to support the convergence of physical and digital (phygital) retail as Singapore's first online-and-offline shopping mall, Funan represents CMT's effort to pave the way forward in serving the needs of present and future generations of shoppers.
Likewise, NomadX at Plaza Singapura is an experiential platform designed to bring to life phygital shopping experiences. The 11,000 sq ft space features "plug and play" rental units fitted with smart retail infrastructure. With a curated selection of 18 tenants, NomadX aims to delight shoppers with customised experiences by harnessing ecommerce, mobile shopping applications and local data analytics.
Complementing our earlier initiatives of CapitaStar, CapitaVouchers and CapitaCard, StarPay was launched in 2018 to enhance shopper convenience and generate new business opportunities for our retailers. Incorporated as an in-app feature on the CapitaStar mobile application, this ePayment service rewards shoppers with instant STAR$® and provides CapitaLand retailers with deeper consumer insights. Shopper traffic declined 0.9% year-on-year to 338.0 million on a comparable mall basis. Despite this, tenant sales per sq ft improved 0.5%.
Year-round marketing activities were also organised to deepen the malls' engagement with their respective communities. The multi-faceted activities were rolled out across the portfolio or in specific malls catering to a wide audience. The world's first DreamWorks KouKou Festival was one such well received event.
We are mindful that our continued success as an industry leader cannot depend on technology alone. Our priority is to understand the profile of shoppers in our local communities and stay nimble in serving their needs. Looking ahead, we remain vigilant of the evolving retail environment and global trends. We will be working more closely with tenants and business partners to create seamless retail experiences that delight regular shoppers and entice new visitors.
Our downtown malls, as well as the outlet stores at IMM Building, have enjoyed good traction among overseas visitors and business travellers. We will continue to leverage different communication channels, including collaborations with government agencies, to extend our outreach to this group of shoppers.
On the sustainability front, we are committed to act responsibly to maximise value for Unitholders and contribute to the communities we operate in. We believe in deepening our stakeholder engagement to ensure success in our journey ahead.
Our success journey has been the culmination of teamwork and dedication. We would like to thank our fellow Board members for their guidance and support. We would also like to extend a special word of thanks to Mr Lim Ming Yan, who relinquished his roles as Deputy Chairman and Non-Executive Non- Independent Director in 2018 after more than five years of service. We wish Ming Yan every success in his next endeavour.
We would also like to record our appreciation to all staff, tenants, retailers and business partners for their unwavering loyalty and contributions. Above all, we are most grateful to our Unitholders, whose continued confidence has made our achievements possible.
14 February 2019