CapitaLand India Trust Review @ 15 February 2023

Basic Profile & Key Statistics

• Main Sector(s): Office & Logistics
• Country(s) with Assets: India
  
• No. of Properties (exclude development/associate/fund): 13

Key Indicators

Performance Highlight

Total property income, NPI, the income available for distribution and DPU increased yoy mainly due to high occupancy and contribution from Aurum Q1, Arshiya Warehouse 7 and Industrial Facility in Mahindra World City which were acquired between Nov 2021 to May 2022.

Rental Reversion

Besides ITPB and ITPC and aVance Hyderabad, rental reversion is positive for other properties. The signing rents are 9% higher than in-place rents in Dec 2021 as well.

Pipeline

Construction for aVance 5 is completed and the rectification of the defects is in progress. The construction work for Casa Grande is expected to be completed by this year's end. Both the construction works for aVance A1 and Gardencity are expected to be completed by 2H 2024.

Acquisition

On 29 Dec 2022, CLINT announced the proposed acquisition of International Tech Park Pune – Hinjawadi, subjected to unitholders approval at EGM which to be held in due course. The acquisition is expected to be DPU accretive.

Distribution Breakdown

• Distributable Income Breakdown:
• 91.5% from Operation
• 8.5% from Fees Payable/Paid in Units
• Distribution = 90% of Distributable Income

Related Parties Shareholding

• REIT Sponsor's Shareholding: Below median for more than 10%
• REIT Manager's Shareholding: Above median for more than 20%
• Directors of REIT Manager's Shareholding: ± 10% from median

Lease Profile

• Occupancy: ± 5% from median
• All income received in India Rupee
• WALE: ± 10% from median
• Highest Lease Expiry within 5 Years: Above median for more than 20%; Falls in 2027 and beyond, without breakdown
• Weighted Average Land Lease Expiry: Most of the properties are freehold

Debt Profile

• Gearing Ratio: ± 10% from median
• Cost of Debt: Above median for more than 20%
• Fixed Rate Debt %: ± 10% from median
• Unsecured Debt %: 100%
• WADM: Below median for more than 10%
• Highest Debt Maturity within 5 Years: ± 10% from median; Falls in this year
• Interest Coverage Ratio: Below median for more than 20%

Diversification Profile

• Top Geographical Contribution: Below median for more than 20%
• Top Property Contribution: Above median for more than 20%
• Top 5 Properties' Contribution: Above median for more than 20%
• Top Tenant Contribution: ± 10% from median
• Top 10 Tenants' Contribution: Above median for more than 10%

Key Financial Metrics

• Property Yield: Above median for more than 20%
• Management Fees over Distribution: Above median for more than 20%; $5.18 distribution for every dollar paid 
• Distribution on Capital: ± 10% from median
• Distribution Margin: ± 10% from median

Trends

• Uptrend: NAV per Unit, Distribution Margin
• Slight Uptrend: DPU
• Downtrend: Occupancy, Interest Coverage Ratio, Property Yield, Distribution on Capital

Relative Valuation

• P/NAV: Above +1SD for 1y; Below average for 3y & 5y
• Dividend Yield: Average for 1y; Above average for 3y; Above +1SD for 5y

Author's Opinion

Favorable	Less Favorable
Diversified Sector	Low REIT Sponsor's Shareholding
High REIT Manager's Shareholding	All income received in India Rupee
Mostly Freehold Properties	High Cost of Debt
100% Unsecured Debt	Short WADM
Low Top Geographical Contribution	Low Interest Coverage Ratio
High Property Yield	High Top Property & Top 5 Properties' Contributions
NAV per Unit Uptrend	High Top 10 Tenants' Contribution
Distribution Margin Uptrend	Non Competitive Management Fees
	Occupancy Downtrend
	Interest Coverage Ratio Downtrend
	Property Yield Downtrend
	Distribution on Capital Downtrend

Compared to the previous half-yearly result, the gross revenue has increased, primarily due to the full 6 months' contribution from Arshiya Warehouse 7 and Industrial Facility in Mahindra World City. However, NPI has remained similar due to increasing property expenses. Additionally, the DPU has been impacted by higher net finance costs. Nonetheless, there are some positive signs, such as a steady occupancy recovery to 92% from 87% a year ago and higher signing rents than in 2021. Although there are several proposed acquisitions via a forward purchase, the closest date one - Aurum Q Parc Building Q2 is only expected to be acquired in 1Q 2024.

For more information, check out:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and details of Singapore REIT

REIT Review - List of previous REIT review posts

To support my work, join:

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: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my own findings and should not be considered as professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.