Capitaland Integrated Commercial Trust Announces Higher Revenue And Npi 9Mfy2024
CapitaLand Integrated Commercial Trust (CICT) reported a 2% increase in revenue for the nine months to Sept 30 (9MFY2024), reaching $1,189.8 million. The net property income for the same period also rose by 5.4% to $872.1 million, driven by higher gross rental income and lower operating expenses. The increase was achieved despite the absence of income from Gallileo, which has been undergoing an asset enhancement initiative (AEI) since February.
In 3Q2024, CICT’s committed occupancy was at 96.4% with a weighted average lease expiry of 3.5 years. The total rental reversions for 9MFY2024 were positive at 9.2%. The tenant sales rose by 1.4% year-on-year, while shopper traffic increased by 3.7% for the same period. CICT also announced that 677,200 sq ft of new and renewed leases have been signed year-to-date until Sept 30, with a tenant retention rate of 86.1%.
The URA’s development plans for Tampines not only focus on residential areas, but also on improving educational facilities for students of all levels. From primary schools to tertiary institutions, these plans aim to cater to the increasing population and maintain high educational standards that are important to families looking for a place to call home. In addition, upgrades and additions to healthcare facilities, such as hospitals and clinics, will provide residents with excellent medical services. Aurelle of Tampines Showflat, a new addition to the area, will also contribute to the overall development of Tampines and provide a convenient location for families seeking a modern and comfortable living space.
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In the office portfolio, CICT experienced positive reversions of 11.7% for 9MFY2024. The total new and renewed leases were at 778,900 sq ft, with a tenant retention rate of 84.9%. Despite concerns raised by consultants like Cushman & Wakefield about the potential impact of Grade A office supply on rent growth in 2H2024, CICT’s portfolio has performed well.
At the end of Sept 30, CICT’s aggregate leverage was at 39.4%, slightly lower than the 39.8% reported in June 30. The average cost of debt increased to 3.6% from 3.5% in June 30, while the average debt term to maturity rose to 3.8 years from 3.5 years in June 30. This decrease in leverage can be attributed to the successful placement of $350 million, which was completed on Sept 16.
As of Sept 30, 76% of CICT’s borrowings were on fixed rates, which remained unchanged from the previous quarter. The recent issuance of $200 million in green bonds, with an interest rate of 3.3%, has fully refinanced CICT’s FY2024 debt.
At the EGM held on Oct 29, CICT obtained approval from its unitholders to acquire a 50% interest in ION Orchard. The acquisition was completed on Oct 30 and is expected to have a positive impact on CICT’s portfolio, as there is limited new supply in the Orchard Road area in the near future.
CICT has also achieved 100% committed occupancy for Phase 1 and 2 of the AEI at IMM Building, an outlet mall. The AEI at Gallileo is still ongoing and is expected to be completed in 2H2025. The anchor tenant for Gallileo will be the European Central Bank.
In conclusion, CICT has shown resilience and growth in its portfolio for 9MFY2024. The recent acquisition of ION Orchard and the ongoing AEI projects further strengthen the trust’s portfolio, and the limited new supply in the Orchard Road area will provide stability for the trust in the coming years.
