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Sunday, May 02, 2021

CapitaLand Integrated Commercial Trust Review @ 2 May 2021

Basic Profile & Key Statistics

CapitaLand Integrated Commercial Trust (CICT) invests in mainly Retail and Office properties which currently owns 24 properties in Singapore and Germany.

Performance Highlight

Gross revenue and NPI increased YoY by more than 60% due to the merger with CapitaLand Commercial Trust.
Tenants' sales recovered to the pre-COVID level despite shopper traffic only recovered to 75% of the pre-COVID level. 
CapitaSpring development and 3 AEIS are on track and all are expected to complete by 2H 2021. 

Related Parties Shareholding

  • REIT sponsor's shareholding is moderate at 28.88%
  • REIT manager's shareholding is low at 0.76%
  • Directors of REIT manager's shareholding is low at 0.01%

Lease Profile

  • Occupancy is slightly high at 95.9%
  • WALE is short at 3.1 years
  • Highest lease expiry within 5 years is high at 30.3% which falls in 2022
  • Weighted average land lease expiry is long at 90.29 years

Debt Profile

  • Gearing ratio is slightly high at 40.8%
  • Cost of debt is moderate  at 2.4%
  • Fixed rate debt % is high at 83%
  • Unsecured debt % is high at 87.8%
  • WADM is long at 4.4 years
  • Highest debt maturity within 5 years is low at 17% which falls in 2023
  • Interest coverage ratio is slightly low at 3.7 times

Diversification Profile

  • Top geographical contribution is high at 95%
  • Top property contribution is low at 12.7%
  • Top 5 properties contribution is low at 40.8%
  • Top tenant contribution is low at 5.3% 
  • Top 10 tenants contribution is low at 20.6% 

Key Financial Metrics

  • Property yield is low at 3.8%
  • Management fees over distribution is moderate at 14% in which unitholders receive S$ 7.14 for every dollar paid 
  • Distribution on capital is low at 2.7%
  • Distribution margin is moderate at 46.7%

Trends

  • Uptrend - NAV per Unit 
  • Flat - Distribution Margin
  • Downtrend - DPU, Interest Coverage Ratio, Property Yield, Distribution on Capital

Relative Valuation

  • Dividend Yield - Past 4 quarters DPU @ 8.69 cents / average yield @ 5.05% = S$ 1.72
  • Price/NAV - NAV @ S$ 2.01 x average P/NAV @ 1.08 = S$ 2.17


Author's Opinion

 Favorable Less Favorable
Diversified SectorLow Manager's Shareholding
Long Weighted Average Land Lease ExpiryLow Directors of REIT Manager's Shareholding
High Fixed Rate Debt %Short WALE
High Unsecured Debt %Concentrated Lease Expiry
Long WADMHigh Top Geographical Contribution
Well Spread Debt MaturityLow Property Yield
Low Top Property & Top 5 Properties ContributionsLow Distribution on Capital
Low Top Tenant & Top 10 Tenants ContributionsDPU Downtrend
NAV per Unit UptrendInterest Coverage Downtrend
 Property Yield Downtrend
 Distribution on Capital Downtrend

With the gradual economic recovery and vaccination in Singapore, retail performance is expected to be improved. However, with the recent surge in community cases and new mall restrictions from May 1 to May 14, CICT performance is expected to be affected. Hopefully, community cases would be contained and mall restriction would not be extended.


For more information, you could refer to:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

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REIT Investing Community - Facebook Group where members share and discuss REIT topic


*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.

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