REIT-TIREMENT - REITs Investing & Personal Finance

REITs investing & personal finance

Sunday, October 23, 2022

CapitaLand Integrated Commercial Trust Review @ 23 October 2022

Basic Profile & Key Statistics
  • Main Sector(s): Retail, Office & Hospitality
  • Country(s) with Assets: Singapore, Australia, Germany, China, Malaysia
  • No. of Properties (exclude development/associate/fund): 26

Key Indicators

Performance Highlight
Gross revenue and NPI increased yoy mainly due to contributions from newly acquired properties and higher gross turnover rent.

Shopper Traffic and Tenant Sales

Both tenant sales and shopper traffic have improved steadily since FEB 2022. As for YTD Sep 2022, tenant sales and shopper traffic have improved yoy, where tenant sales have exceeded the 2019 level. 

Rental Reversion
Based on average incoming committed rents versus average outgoing rents, the YTD Sep 2022 rental reversion is at 0.6% for the retail portfolio and 7.9% for the office portfolio.

Asset Enhancement Initiative
AEI for CQ @ Clarke Quay has started and would be completed in phases until 3Q 2023 while AEI for Raffles City is to be completed in 4Q 2022.

Sensitivity to Interest Rate
For every 1% increase in interest rate, the estimated impact on DPU would be 0.30 cents, around 2.9%.

Related Parties Shareholding

  • REIT sponsor's shareholding: Below median for more than 10%
  • REIT manager's shareholding: ± 10% from median
  • Directors of REIT manager's shareholding: Below median for more than 20%

Lease Profile

  • Occupancy: ± 5% from median
  • WALE: ± 10% from median
  • Highest lease expiry within 5 years: ± 10% from median; Falls in 2027 and beyond, without breakdown
  • Weighted average land lease expiry: ± 10% from median

Debt Profile

  • Gearing ratio: Above median for more than 10%
  • Cost of debt: ± 10% from median
  • Fixed rate debt %: ± 10% from median
  • Unsecured debt %: Above median for more than 10%
  • WADM: Above median for more than 20%
  • Highest debt maturity within 5 years: Below median for more than 20%; Falls in 2024
  • Interest coverage ratio: ± 10% from median

Diversification Profile

  • Top geographical contribution: Above median for more than 20%
  • Top property contribution: Below median for more than 20%
  • Top 5 properties' contribution: Below median for more than 20%
  • Top tenant contribution: Below median for more than 20%
  • Top 10 tenants' contribution: Below median for more than 20%

Key Financial Metrics

  • Property yield: Below median for more than 10%
  • Management fees over distribution: Below median for more than 10%; $8.13 distribution for every dollar paid 
  • Distribution on capital: Below median for more than 10%
  • Distribution margin: ± 10% from median


*As CapitaLand Mall Trust and CapitaLand Commercial Trust merger was completed in 4Q 2020, so let's focus on after this period.
  • Uptrend: Property Yield, Distribution on Capital
  • Slight Uptrend: NAV per Unit, Interest Coverage Ratio
  • Flat: Occupancy, Distribution Margin 
  • Slight Downtrend: DPU

Relative Valuation

  • P/NAV: Below -2SD for 1y, 3y & 5y
  • Dividend Yield: Above +2SD for 1y, 3y & 5y

Author's Opinion

 Favorable Less Favorable
Diversified SectorLow Directors of REIT Manager's Shareholding
High Unsecured Debt %High Gearing Ratio
Long WADMHigh Top Geographical Contribution
Well Spread Debt MaturityLow Property Yield
Low Top Property & Top 5 Properties ContributionsLow Distribution on Capital
Low Tenant & Top 10 Tenants Contributions 
Competitive Management Fees 
Property Yield Uptrend 
Distribution on Capital Uptrend

The gross revenue and NPI have improved as compared to the previous quarter probably due to contributions from newly acquired properties. Occupancy has also improved this quarter coupled with the positive YTD rental reversion. With the improvement in performance and recovery in tourism, CICT fundamentals should remain resilient. 

You could also refer below for more information:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

And you could join the following to support my work:

Singapore REITs Post Telegram Channel - Join to receive posts for Singapore REITs

REIT-TIREMENT Patreon - Support my work and get exclusive content

REIT-TIREMENT Facebook Page - Support by liking my Facebook Page

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 due to 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.

No comments:

Post a Comment