CICT’s 1H 2022 distributable income up 3.4% to S$347.3 million
- Stronger performance due to tailwinds from Singapore’s reopening and proactive portfolio reconstitution efforts
- Embarking on asset enhancement initiative for CQ @ Clarke Quay following completion of acquisitions of CapitaSky and three Australian assets
Singapore, 28 July 2022 – CapitaLand Integrated Commercial Trust Management Limited (CICTML), the manager of CapitaLand Integrated Commercial Trust (CICT or the Trust), reported today a distributable income of S$347.3 million for the six months ended 30 June 2022 (1H 2022), an increase of 3.4% compared to the S$335.9 million in 1H 2021. 1H 2022 distribution per unit (DPU) was 5.22 cents1. The record date for 1H 2022 DPU is Friday, 5 August 2022, and Unitholders can expect to receive the DPU on Friday, 9 September 2022.
On a year-on-year basis, CICT’s 1H 2022 gross revenue of S$687.6 million rose 6.5% from S$645.7 million and net property income of S$501.6 million gained 6.2% from S$472.2 million. The positive financial performance was largely driven by contributions from the completion of the acquisitions of 70.0% interest in CapitaSky and three Australian assets2, as well as higher rental income. This was partially offset by the divestment of JCube and higher operating expenses.
As at 30 June 2022, CICT’s adjusted net asset value per unit, after excluding 1H 2022 distributable income to Unitholders, was marginally higher at S$2.07, up from S$2.06 as at 31 December 2021.
We continue to see CICT’s portfolio recovery, in line with the reopening of Singapore’s borders and easing of COVID-19 community measures. Riding on the positive momentum, CICT’s operating metrics, including tenant sales, shopper traffic, atrium space take-up and return of office community have recorded improvements
Mr Tony Tan, CEO of CICTML, said: “We continue to see CICT’s portfolio recovery, in line with the reopening of Singapore’s borders and easing of COVID-19 community measures. Riding on the positive momentum, CICT’s operating metrics, including tenant sales, shopper traffic, atrium space take-up and return of office community have recorded improvements. As Singapore welcomes more international visitors, we are also seeing higher occupancy levels for the hotels at Raffles City Singapore and the serviced residence at CapitaSpring. We expect contributions from the completions of CICT’s acquisitions of 70.0% interest in CapitaSky and three Australian assets to uplift the portfolio performance from 3Q 2022.”
“Building on the reconstituted portfolio, CICT will continue to be disciplined in executing our multi-pronged value creation strategy. To drive organic growth, we proactively manage our asset and portfolio leases and vacancies, with a view to achieving higher committed occupancies at rents in line with or above market rents. We will also explore opportunities that fit our strategic investment criteria and consider optimal investment and funding structures to ensure long-term sustainable growth of the Trust.”
Summary of CICT’s results
|
1H 2022 |
1H 2021 |
FY 2021 |
FY 2020 |
Gross Revenue (S$’000) |
687,599 |
645,657 |
1,305,051 |
745,209 |
Net Property Income (S$’000) |
501,620 |
472,163 |
951,082 |
512,740 |
Amount Available for Distribution (S$’000) |
351,200 |
338,061 |
687,416 |
375,645 |
Distributable Income (S$’000) 1, 2, 3, 4 |
347,296 |
335,894 |
674,713 |
369,384 |
DPU (cents) |
5.22 5 |
5.18 |
10.40 |
8.69 |
Notes
1. For 1H 2022, S$3.9 million comprising S$2.4 million and S$1.5 million received from CapitaLand China Trust (CLCT) and Sentral REIT respectively had been retained for general corporate and working capital purposes.
2. For 1H 2021, S$2.2 million comprising S$0.8 million and S$1.4 million received from CLCT and Sentral REIT respectively had been retained for general corporate and working capital purposes.
3. For FY 2021, S$12.7 million comprising S$10.0 million and S$2.7 million received from CLCT and Sentral REIT respectively had been retained for general corporate and working capital purposes.
4. For FY 2020, CICT had released S$6.25 million taxable income from RCS Trust. S$12.5 million received from CLCT for had been retained for general corporate and working capital purposes.
5. Distribution comprises taxable income of 4.49 cents, tax-exempt income of 0.70 cents and capital of 0.03 cents which relates to the distribution of income repatriated from Australia by way of tax deferred distributions.
Proactive portfolio and asset management
As at 30 June 2022, CICT’s committed portfolio occupancy stood at 93.8%. The Trust signed approximately 1.7 million square feet (sq ft) of new leases and renewals in 1H 2022, comprising around 0.6 million sq ft of retail space and 1.1 million sq ft of office space. Major new leases and renewals completed in 1H 2022 included Paris Baguette and Lululemon at Raffles City Singapore, Smile Dessert at Funan, as well as Rakuten Asia Pte. Ltd. at CapitaGreen. The high tenant retention rate for Singapore retail and office was 89.1% and 91.4% respectively. CICT will continue to proactively backfill vacancy in the portfolio as well as manage the remaining leases expiring in 2022.
Proactive portfolio and asset management
As at 30 June 2022, CICT’s committed portfolio occupancy stood at 93.8%. The Trust signed approximately 1.7 million square feet (sq ft) of new leases and renewals in 1H 2022, comprising around 0.6 million sq ft of retail space and 1.1 million sq ft of office space. Major new leases and renewals completed in 1H 2022 included Paris Baguette and Lululemon at Raffles City Singapore, Smile Dessert at Funan, as well as Rakuten Asia Pte. Ltd. at CapitaGreen. The high tenant retention rate for Singapore retail and office was 89.1% and 91.4% respectively. CICT will continue to proactively backfill vacancy in the portfolio as well as manage the remaining leases expiring in 2022.
To ensure attractiveness to shoppers, CICT adopts a proactive stance in curating the mall experience and its downtown malls in Singapore will be ushering in diverse and refreshed concepts in the coming months. These include over 50 new stores in Raffles City Singapore following its asset enhancement initiative (AEI); more than 10 new brands that strengthen the positioning of Bugis Junction and Bugis+ as a 24/7 lifestyle destination for the young and young-at-heart; and several new F&B, wellness and fashion offerings in Funan.
CICT is also embarking on a S$62.0 million AEI to transform CQ @ Clarke Quay into a day-and-night destination for both locals and tourists, in line with the ongoing rejuvenation of the Singapore River precinct. The property will continue to operate during the AEI, which will be carried out in phases from 3Q 2022 to 3Q 2023. The scope of the AEI includes improving the daytime thermal comfort of the property’s inner streets, introducing tenants with an exciting blend of lifestyle and F&B concepts that best utilise the unique typology of the conserved warehouses at Block B, enhancing the selection of day-and-night dining options, updating the outdoor refreshment areas and working with tenants to make CQ @ Clarke Quay a pet-friendly attraction. Around 34% of the total project cost is dedicated to green features such as a more energy-efficient chiller and a new ETFE (ethylene tetrafluoroethylene) canopy. Following the completion, CQ @ Clarke Quay is expected to upgrade its green building rating conferred by the Building and Construction Authority (BCA) from Green Mark Certification to Green Mark GoldPLUS.
Prudent capital management
CICT’s aggregate leverage was 40.6% mainly due to the completion of the acquisitions of 70.0% interest in CapitaSky and the three Australian assets. About 81% of the Trust’s total borrowings were on fixed rate borrowings with an average term to maturity of 4.4 years and its average cost of debt at 2.4% per annum as at 30 June 2022. CICT has maintained its credit rating of “A-” and “A3” by Standard & Poor’s and Moody’s respectively.
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1 Distribution comprises taxable income of 4.49 cents, tax-exempt income of 0.70 cents and capital of 0.03 cents which relates to the distribution of income repatriated from Australia by way of tax deferred distributions.
2 The three Australian assets are 66 Goulburn Street, 100 Arthur Street, and 101-103 Miller Street and Greenwood Plaza.