CICT first-half DPU up 0.8% on Singapore reopening, acquisitions

CICT is also embarking on a $62 million asset enhancement initiative to transform CQ @ Clarke Quay. PHOTO: CAPITALAND, META ARCHITECTURE AND FORMWERKZ ARCHITECTS

SINGAPORE (THE BUSINESS TIMES) - CapitaLand Integrated Commercial Trust (CICT) got a first-half income boost from Singapore's reopening and its own efforts to reconstitute its portfolio of assets.

CICT on Thursday (July 28) posted a 0.8 per cent increase in distribution per unit (DPU) to 5.22 cents for the six months to June.

Net property income for the period rose 6.2 per cent to $501.6 million, driven by CICT's acquisition of a 70 per cent interest in the CapitaSky development in Robinson Road and three Australian assets, as well as higher rental income. 

This was partly dampened by its divestment of JCube mall and a 7.2 per cent rise in property operating expenses to $186 million.

The trust's aggregate leverage was higher at 40.6 per cent as at end-June, compared with 37.2 per cent as at the end of 2021, due to the acquisitions. Its interest cover remained unchanged at 4.1 times.

Some 81 per cent of its total borrowings were on fixed rates, with an average term to maturity of 4.4 years. The average cost of debt is 2.4 per cent per annum.

Committed portfolio occupancy stood at 93.8 per cent as at end-June, with about 1.7 million sq ft of new leases and renewals in the first half of the year. This comprises 600,000 sq ft of retail space and 1.1 million sq ft of office space. Notable tenants include Lululemon at Raffles City Singapore and Rakuten Asia at CapitaGreen.

"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," said Mr Tony Tan, chief executive of the trust manager.

Mr Tan anticipates higher occupancy levels for the hotels at Raffles City Singapore and the serviced residence at CapitaSpring. 

CapitaSky and the Australian assets are also expected to lift third-quarter portfolio performance. Over in Australia, there is a "flight to quality", which resulted in increases in face rents in core location buildings, the trust noted in its earnings report.

CICT will be refreshing its malls, with more than 50 new stores at Raffles City Singapore following its asset enhancement initiative (AEI) and 10 new brands at Bugis Junction and Bugis+. As recently announced, it is also embarking on a $62 million AEI to transform CQ @ Clarke Quay.

CICT will continue to explore opportunities that fit its strategic investment criteria, Mr Tan added.

The counter closed flat at $2.14 on Wednesday.

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