CapitaLand India Trust Review @ 3 May 2023

Basic Profile & Key Statistics

• Main Sector(s): Office & Logistics
• Country(s) with Assets: India
  
• No. of Properties (exclude development/associate/fund): 10

Key Indicators

Performance Highlight

Total property income and NPI 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, ITPC and aVance Hyderabad, rental reversion is positive for other properties.

Acquisition

ITPP-H acquisition was approved by unitholders at an EGM on 17 April 2023 and is expected in 1H 2023. 

Pipeline (3rd Party Forward Purchase)

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.

Development

There are 4 DC and ITPB MTB6 development projects on hand, where the construction of CapitaLand DC Navi Mumbai 1 and CapitaLand DC ITPH is expected to commence by 2Q 2023 and the construction of CapitaLand DC ITPB is expected to commence by 4Q 2023. As for MTB 6 of ITPB, the building completion is expected by 2H 2024.

Related Parties Shareholding

• REIT Sponsor's Shareholding: Below median by 10% or more
• REIT Manager's Shareholding: Above median by 20% or more
• Directors of REIT Manager's Shareholding: Above median by 20% or more

Lease Profile

• Occupancy: ± 5% from median
• All income received in India Rupee
• WALE: ± 10% from median
• Highest Lease Expiry within 5 Years: Above median by 20% or more; Falls in 2027 and beyond, without breakdown
• Weighted Average Land Lease Expiry: Above median by 20% or more

Debt Profile

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

Diversification Profile

• Top Geographical Contribution: Below median by 20% or more
• Top Property Contribution: Above median by 20% or more
• Top 5 Properties' Contribution: Above median by 20% or more
• Top Tenant Contribution: Above median by 10% or more
• Top 10 Tenants' Contribution: Above median by 20% or more

Key Financial Metrics

• Property Yield: Above median by 20% or more
• Management Fees over Operating Distributable Income: Above median by 10% or more; $5.26 distribution for every dollar paid 
• Operating Distributable Income on Capital: Above median by 10% or more
• Operating Distributable Income Margin: ± 10% from median
• Operating Distributable Proportion: ± 10% from median

DPU Breakdown

• TTM DPU Breakdown
• 90.6% from Operation
• 9.4% from Management Fees Paid in Units
• TTM DPU = 90% of Distributable Income

Trends

• Uptrend: NAV per Unit, Operating Distributable Income Margin
• Slight Uptrend: DPU from Operation
• Downtrend: Occupancy, Interest Coverage Ratio, Property Yield, Operating Distributable Income on Capital

Relative Valuation

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

Author's Opinion

Favorable	Less Favorable
High REIT Manager's Shareholding	All income received in India Rupee
High Directors of REIT Manager's Shareholding	High Cost of Debt
Long Weighted Average Land Lease Expiry	Short WADM
100% Unsecured Debt	Low Interest Coverage Ratio
Low Top Geographical Contribution	High Top Property & Top 5 Properties' Contributions
High Property Yield	High Top Tenant & Top 10 Tenants' Contributions
High Operating Distributable Income on Capital	Non-Competitive Management Fees
NAV per Unit Uptrend	Occupancy Downtrend
Operating Distributable Income Margin Uptrend	Interest Coverage Ratio Downtrend
	Property Yield Downtrend
	Operating Distributable Income on Capital Downtrend

In terms of SGD, the gross revenue and NPI are similar to the previous quarter. However, there is around 1/3 of the debt needs to be refinanced this year, which could potentially drive up the cost of debt. On a positive note, the recent pause in monetary policy tightening by the MAS should be favorable to CLINT, as it is likely to lead to a stabilization of the S$/INR FX rate. 

 

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*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.