Capitaland Ltd.

12/08/2024 | Press release | Distributed by Public on 13/08/2024 06:28

CICT delivers resilient 1H 2024 performance with distributable income up 3.7% year on year to S$366.5 million

Distribution per unit rises 2.5% to 5.43 cents

Singapore, 13 August 2024 - CapitaLand Integrated Commercial Trust (CICT) announced a distributable income of S$366.5 million for the six months ended 30 June 2024 (1H 2024). This is a 3.7% year-on-year (y-o-y) increase compared to the S$353.2 million for 1H 2023. The resilient financial performance underscores CICT's proactive portfolio management as well as its prudent capital and cost management.

CICT's 1H 2024 distribution per unit (DPU) rose 2.5% to 5.43 cents. Based on the closing price of S$1.98 per unit on 28 June 2024, the last trading day in June, CICT's annualised distribution yield for 1H 2024 is 5.5%. With the record date on Wednesday, 21 August 2024, CICT unitholders can expect to receive their 1H 2024 DPU on Thursday, 26 September 2024.

1H 2024 gross revenue grew 2.2% y-o-y to S$792.0 million due to higher gross rental income, partially offset by the absence of income from Gallileo which has been undergoing an asset enhancement initiative (AEI) since February 2024. Net property income for 1H 2024 rose 5.4% y-o-y to S$582.4 million, mainly due to lower utility expenses and savings from property management reimbursements under the new property management agreement.1

Mr Tony Tan, CEO of CapitaLand Integrated Commercial Trust Management Limited (the manager of CICT), said: "We delivered stable returns to unitholders, increasing 1H 2024 DPU by 2.5% y-o-y. This is despite a temporary absence of income from Gallileo due to the ongoing AEI and an enlarged unit base from the distribution reinvestment plan in 1Q 2024. Leveraging our strong portfolio management capabilities, we achieved positive rent reversions by signing and renewing leases for over one million sq ft of space. We have also made significant strides in managing the remaining leases slated to expire in 2024, with the majority of them pending signing of agreements."

"Our asset enhancement initiatives at IMM Building in Singapore and Gallileo in Germany are progressing well and are expected to complete in 2H 2025. Including leases under negotiation, phases 1 and 2 of IMM Building's AEI have achieved a high committed occupancy of 98.7%, while Gallileo's committed occupancy stands at 96.7%. Tenants have given positive feedback on our newly enhanced lobby at 101 Miller Street in Australia, which was unveiled on 10 July 2024. Looking ahead, our focus will remain on proactive portfolio, capital and cost management while staying agile and responsive to evolving market conditions as we actively seek growth opportunities to enhance the quality of our portfolio," added Mr Tan.

Mr Tony Tan, CEO of CICTML
Phase 1 & 2 of the level 1 AEI at IMM Building is in progress. Targeted to open in 4Q 2024, a new food court on level 3, Makan Street (pictured), will complement post-AEI offerings.
Completed asset enhancement works at the ground floor lobby of 101 Miller Street

­Summary of CICT's results

1H 2024

1H 2023

Change

FY 2023

FY 2022

Gross Revenue (S$'000)

791,961

774,777

2.2%

1,559,934

1,441,747

Net Property Income (S$'000)

582,364

552,337

5.4%

1,115,907

1,043,283

Amount Available for Distribution (S$'000)

370,704

358,983

3.3%

728,486

712,968

Distributable Income (S$'000) 2

366,479

353,245

3.7%

715,726

702,374

DPU (cents)

5.43

5.30

2.5%

10.75

10.58

Notes

1. The following sums were retained for general corporate and working capital purposes: 2. For 2H 2022, S$6.7 million was retained, comprising S$5.5 million from CLCT and S$1.2 million from Sentral REIT.
- For 1H 2024, S$4.2 million comprised S$4.0 million and S$0.2 million received from CapitaLand China Trust (CLCT) and Sentral REIT, respectively.
- For 1H 2023, S$5.7 million comprised S$4.5 million and S$1.2 million received from CLCT and Sentral REIT, respectively.
- For FY 2023, S$12.7 million comprised S$9.5 million and S$3.2 million received from CLCT and Sentral REIT, respectively.
- For FY 2022, S$10.6 million comprised S$7.9 million and S$2.7 million received from CLCT and Sentral REIT, respectively.

Proactive portfolio management

Despite macroeconomic uncertainties, CICT's portfolio registered healthy operating metrics in 1H 2024. As at 30 June 2024, its portfolio achieved a high committed occupancy of 96.8%, with retail, office and integrated development portfolios recording 99.0%, 95.3% and 98.8% respectively. The Singapore retail and office portfolios achieved positive rent reversions of 9.3% and 15.0% respectively, based on the average rent of signed leases in 1H 2024.

Leasing momentum remained strong for CICT in 1H 2024, underpinned by its proactive leasing approach and active tenant engagement efforts. During this period, CICT secured approximately 1.1 million sq ft of new leases and renewals, evenly split across the retail and office portfolios. Its Singapore retail and office portfolios garnered high tenant retention rates of above 80% in 1H 2024.

In 1H 2024, CICT's retail portfolio saw new store openings, including those from the Food & Beverages, Supermarket, Hobbies and Home & Living trades. Several new-to-market and new-to-portfolio concepts and brands also debuted at CICT's properties. These included the world-renowned lifestyle destination SushiSamba at Capital Tower; the award-winning Italian-Mediterranean restaurant IL Clay SupperClub at CQ @ Clarke Quay, helmed by celebrated Italian Pizzaiolo Ciro Sorrentino; and the trendy neighbourhood café Lola's Café, which opened a new duplex outlet at Tampines Mall.

CICT's office portfolio attracted new tenants, including those from the Financial Services, Food & Beverages, and Real Estate & Property Services trades. Among the tenants who signed new or renewed leases in 2Q 2024 were Jain Global (Singapore) Pte. Ltd. and Wintermute Asia Pte. Ltd. at CapitaGreen and China-Base Resource Singapore Pte. Ltd. at Raffles City Tower in Singapore, as well as Australian Pharmaceutical Industries Pty Ltd (Wesfarmers Health) at 66 Goulburn Street in Australia.

Prudent and agile capital management

CICT maintained a healthy balance sheet with a stable adjusted net asset value per unit of S$2.07 as at 30 June 2024. The Trust continues to adopt a prudent and agile capital management strategy, ensuring that its funding sources are diversified to provide greater financial flexibility.

As at 30 June 2024, CICT's average cost of debt remained at 3.5%, with 76% of its total borrowings on fixed interest rates. The Trust's debt maturity profile is well-staggered across various tenures, with an average term-to-maturity of 3.5 years.
On 10 July 2024, CICT, through CMT MTN Pte. Ltd., issued S$300 million 10-year fixed rate notes at 3.75% per annum under its US$3.0 billion Euro-Medium Term Note Programme to finance or refinance, in part or in whole, the Eligible Green Projects undertaken by the Group in accordance with CICT's Green Finance Framework2. About 80% of the debt due to expire in 2H 2024 has either been refinanced or is currently in the loan documentation stage post-June 2024.

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1. Please refer to the circular dated 22 March 2023 for more details.
2. Please see the details of the Eligible Green Projects and the CICT Green Finance Framework on our website at https://www.cict.com.sg/pdf/CICT_Green_Finance_Framework_June_2024.pdf

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