Another round of earnings season is upon us again (and this is the last round of earning season for the calendar year.) Over the next couple of weeks, Singapore-listed companies will be releasing their financial results or business updates for the quarter ended 30 September 2022.

The first company in my long-term investment portfolio (you can check out a full list of companies I have invested here) to make available its business update for the 3rd quarter of FY2022 is CapitaLand Integrated Commercial Trust (SGX:C38U), or CICT for short – with the REIT’s management having made available its business update after market hours last Friday (21 October 2022.)

Before I begin, for those of you who are not familiar with the REIT, here’s a brief introduction about it – at the time of writing, the REIT’s property portfolio comprises a total of 26 retail (10 properties, all located in Singapore), office (10 properties – 6 in Singapore, 2 in Australia, and 2 in Germany), and business park (6 properties – 5 in Singapore, and 1 in Australia) properties valued at S$24.2bn in Singapore, Australia, and Germany.

In this post, you will find my review of the REIT’s latest financial performance (as the REIT have switched to half-yearly reporting of its financial results, for the current quarter under review, it only provided a snippet of it), along with its portfolio occupancy and debt profile.

Let’s begin:

Financial Performance (Q3 FY2021 vs. Q3 FY2022, and 9M FY2021 vs. 9M FY2022)

In this section, let us take a look at the REIT’s key financial performance on a quarter-on-quarter (Q3 FY2021 vs. Q3 FY2022), as well as on a year-on-year (9M FY2021 vs. 9M FY2022) basis:

Q3 FY2021 vs. Q3 FY2022:

Q3 FY2021Q3 FY2022% Variance
Gross Revenue
Property Operating
Expenses (S$’mil)
Net Property
Income (S$’mil)

My Observations: On a quarter-on-quarter (q-o-q) basis, its another decent set of results reported by the REIT in my opinion – with both its gross revenue and net property income recording double-digit percentage increases due to contributions by new acquisitions (namely 66 Goulburn Street, 100 Arthur Street, 50% interest in 101-103 Miller Street and Greenwood Plaza in Sydney, Australia, and 70% interest in CapitaSky in Singapore.)

Property operating expenses went up by 16.7% as a result of an increase in utilities expenses – which is pretty much within my expectations.

9M FY2021 vs. 9M FY2022:

9M FY20219M FY2022% Variance
Gross Revenue
Property Operating
Expenses (S$’mil)
Net Property
Income (S$’mil)

My Observations: Similar to its q-o-q results, the REIT’s financial performance on a year-on-year (y-o-y) basis also saw its gross revenue and net property income recording growths – though at just a high single-digit percentage (due to a flat q-o-q result in the first quarter, and you can read my review about it here), with improvements as a result of contributions from newly acquired properties.

The double-digit percentage climb in its property operating expenses was due to higher utilities cost.

Portfolio Occupancy Profile (Q2 FY2022 vs. Q3 FY2022)

When it comes to reviewing a REIT’s portfolio occupancy profile, I always compare the statistics recorded for the current quarter under review against the previous quarter 3 months ago to find out whether or not they have continued to remain resilient, or showing signs of weakness.

The following table is CICT’s portfolio occupancy profile for the current quarter under review (i.e. Q3 FY2022 ended 30 September 2022) compared against the previous quarter 3 months ago (i.e. Q2 FY2022 ended 30 June 2022):

Q2 FY2022Q3 FY2022
Portfolio Occupancy (%)
WALE (by GRI – in Years)
2.1 years2.2 years
Portfolio Occupancy (%)
WALE (by GRI – in Years)
4.1 years4.0 years
Portfolio Occupancy (%)
(Integrated Development)
WALE (by GRI – in Years)
(Integrated Development)
5.5 years5.4 years

My Observations: In terms of portfolio occupancy, all 3 property types (in retail, office, as well as integrated development) have continued their upward climb, and at such percentages, I consider them to be very resilient.

No single tenant contributes more than 5.1% towards the REIT’s total gross rental income, and the contribution of top 10 tenants (to its total gross revenue income) is at 20.3%. In terms of rental expiry, they are well-spread out over the next couple of years – for the remaining quarter of FY2022, only 1.8% of the retail leases, and 0.8% of the office leases will be due to renewal, with another 13.4% of the retail leases and 5.6% of the office leases due for renewal in FY2023.

Debt Profile (Q2 FY2022 vs. Q3 FY2022)

Similar to how I have reviewed the blue-chip REIT’s portfolio occupancy profile in the previous section, I will also be reviewing its debt profile by taking the statistics reported for the current quarter under review (i.e. Q3 FY2022 ended 30 September 2022) and compare them against that reported in the previous quarter 3 months ago (i.e. Q2 FY2022 ended 30 June 2022), as follows:

Q2 FY2022Q3 FY2022
Aggregate Leverage
Interest Coverage
Ratio (times)
Average Term to
Debt Maturity (years)
4.4 years4.1 years
Average Cost of
Debt (%)
% of Borrowings Hedged
at Fixed Rates (%)

My Observations: Compared to the previous quarter, the REIT’s aggregate leverage weakened slightly, with its aggregate leverage up by 0.6pp to 41.2%, coupled with its interest coverage ratio down slightly to 3.9x.

Not only that, the percentage of borrowings hedged at fixed rates also fell slightly to 80% (even so, personally, I think that the ratio is also a very high one), with the average cost of debt up by 0.1pp to 2.5%.

Finally, as far as debt maturity over the next couple of years is concerned, it is well-spread out – with just S$75m (or 1%) of debt maturing in the final quarter of FY2022, S$1,263m (or 12%) of debt maturing in FY2023, S$1,698m (or 17%) maturing in FY2024, and the remaining S$7,162m (or 70%) of debt maturing only in FY2025 and later.

Macroeconomic Outlook in CapitaLand Integrated Commercial Trust’s Key Markets [from the REIT’s Presentation Slides]



  • Strong positive office net absorption (0.56m sq ft) in 3Q 2022, surpassing the total take up (0.32m sq ft) for the whole of 2021.
  • Key demand drivers are expansions by tech firms, flexible workspace operators and non-banking financial companies.
  • CBRE Research expects return-to-office demand to drive Core CBD (Grade A) rents to a full-year growth of 8% to 9% in 2022.
  • Rental growth for 2023 is likely to remain positive due to the limited new supply beyond 2023 and barring a sustained recession.


  • Leasing activity started to pick up in 3Q 2022 with demand primarily driven by F&B operators. Retail rents for Orchard Road, City Hall/Marina Centre and Fringe areas registered nascent recovery in 3Q 2022. The suburban market continued to outperform.
  • CBRE Research expects overall retail rents to continue recovering for the rest of 2022 and into 2023.


  • GDP is expected to grow slower to 3.25% over 2022, 1.75% in 2023, and 1.75% in 2024, due to higher inflation and higher interest rate.
  • CPI is expected to reach around 7.75% around the end of the year before starting to decline in early 2023.


  • 1Q 2022 real GDP edged up 0.2%. Private consumption continues to be weak due to pandemic-related restrictions, supply bottlenecks and Russian war.
  • GDP is expected to grow 1.3% in 2023. This is a significant downward reversion compared to the Spring Forecast, due to the deterioration of the outlook for global trade and the loss of purchasing power, which weigh on business and consumer confidence.
  • CPI is expected to be around 7.9% for 2022 before starting to decline in 2023, forecasted to be 4.8%.

Closing Thoughts

Apart from a slight weakening in its debt profile (compared to the previous quarter 3 months ago), in my opinion, the REIT’s latest set of results is a stable one on the whole – in terms of its financial performance, it was pretty much within expectations where q-o-q and y-o-y growth was due to contributions from the newly acquired properties; also, its good to note that the overall occupancy rates for its retail, office, and integrated development properties were all maintained at above 95%.

With that, I have come to the end of my review on CapitaLand Integrated Commercial Trust’s latest third quarter business update. Hope you’ve found the contents presented above useful, and do take note that all the opinions above are purely mine, which I’m sharing for educational purposes only. They do not represent any buy or sell calls for the REIT’s units. As always, please do your own due diligence before you make any investment decisions.

Related Documents

Disclaimer: At the time of writing, I am a unitholder of CapitaLand Integrated Commercial Trust.

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