Previously known as CapitaLand Mall Trust when it was listed on the Singapore Exchange back in July 2002, it was renamed to CapitaLand Integrated Commercial Trust (SGX:C38U), or CICT for short, following its merger with CapitaLand Commercial Trust back in November 2020.

Today, the REIT’s portfolio comprises of real estate used for retail and/or office purposes, and at the time of writing of this review, it has 21 properties in Singapore, 2 properties in Frankfurt, Germany, and 3 properties in Sydney, Australia.

This morning (01 August 2023), it has posted its results for the first half of FY2023 ended 30 June, and in this post, you will find a review of its latest financial performance, portfolio occupancy and debt profile, as well as its distribution payout to unitholders.

Let’s begin:

Financial Performance (1H FY2022 vs. 1H FY2023, and Q2 FY2022 vs. Q2 FY2023)

I will first be reviewing CICT’s financial performance for the first half of the year, and then for the 2nd quarter:

1H FY2022 vs. 1H FY2023:

1H FY20221H FY2023% Variance
Gross Revenue
Property Operating
Expenses (S$’mil)
Net Property
Income (S$’mil)
Distributable Income
to Unitholders

My Observations: Pretty decent set of financial figures I must say, as far as its gross revenue and net property income are concerned, where they improved by 12.7% and 10.1% respectively, driven by the full contribution from the enlarged portfolio following the acquisitions of 66 Goulburn Street, 100 Arthur Street, 50.0% interest in 101-103 Miller Street and Greenwood Plaza in Sydney, Australia, and CapitaSky in 1H FY2022, along with higher occupancy and rental rates achieved, and higher rental on gross turnover.

On the other hand, the 19.6% jump in property operating expenses was attributed to the newly acquired properties, and higher utilities expenses.

Finally, for its distributable income to unitholders in 1H FY2023, S$5.7m (comprising of S$4.5m and S$1.2m received from CapitaLand China Trust and Sentral REIT had been retained for general corporate and working capital purposes), which is higher compared to S$3.9m retained last year.

Q2 FY2022 vs. Q2 FY2023:

Q2 FY2022Q2 FY2023% Variance
Gross Revenue
Property Operating
Expenses (S$’mil)
Net Property
Income (S$’mil)

My Observations: Similar to its performances for the 1st half of FY2023, the financial figures reported for the 2nd quarter is a stable one, with the 11.0% increase in its gross revenue contributed by newly acquired properties.

However, due to a higher percentage increase in property operating expenses (incurred by the newly acquired properties, as well as higher utilities expenses), net property income went up by a smaller percentage (at 9.0%).

Portfolio Occupancy (Q1 FY2023 vs. Q2 FY2023)

Moving on, let us study CICT’s latest portfolio occupancy in the table below, where I have taken the figures recorded for the current quarter under review (i.e., Q2 FY2023 ended 30 June 2023) and compare them against the figures recorded in the previous quarter 3 months ago (i.e., Q1 FY2023 ended 31 March 2023) to find out if they continue to remain resilient:

Q1 FY2023Q2 FY2023
Portfolio Occupancy (%)
Portfolio WALE (by GRI – years)
2.2 years2.2 years
Portfolio Occupancy (%)
Portfolio WALE (by GRI – years)
3.7 years3.6 years
Portfolio Occupancy (%)
(Integrated Development)
Portfolio WALE (by GRI – years)
(Integrated Development)
5.4 years5.3 years

My Observations: Portfolio occupancy rates for all 3 property types (retail, office, and integrated development) continues to record further improvements, which is good to note.

Rental reversion were also positive – with retail properties recording a +6.9% rental reversion, and office properties recording a +9.6% rental reversion for the first half of FY2023.

In terms of lease expiries, for the 2nd half of FY2023, only 3.0% of retail leases, and 2.1% of the office leases will be expiring. Subsequently, no more than 14.7% of the retail leases, and 8.5% of the office leases will be expiring in any single year.

Debt Profile (Q1 FY2023 vs. Q2 FY2023)

Just like how I have reviewed the REIT’s portfolio occupancy profile in the previous section, I will also be reviewing its debt profile by taking the figures reported for the current quarter under review and compare them against that reported in the previous quarter 3 months ago (i.e., Q1 FY2023 vs. Q2 FY2023), as follows:

Q1 FY2023Q2 FY2023
Aggregate Leverage
Interest Coverage
Ratio (times)
Average Term to
Debt Maturity (years)
4.2 years4.3 years
Average Cost of
Debt (%)
% of Borrowings Hedged
to Fixed Rates (%)

My Observations: Aggregate leverage at 40.4% remains healthy in my opinion.

Another thing to note is that, in the 2nd half of FY2023, only 1% (or S$130m) of borrowings are due for refinancing. In the coming years ahead, 15% (or S$1,528m) of borrowings will be expiring in FY2024, 13% (or S$1,302m) of borrowings will be expiring in FY2025, and 71% (or S$7,051m) of borrowings will be expiring only in FY2026 or later.

With about 22% of unhedged borrowings, a 1% per annum increase in interest rate will lead to an estimated additional interest expense of S$21.21m per annum, and an estimated DPU impact of -0.32 cents per annum, based on the number of units in issue as at 30 June 2023.

Distribution Payout to Unitholders (1H FY2022 vs. 1H FY2023)

The management of CICT declares a distribution payout to unitholders on a half-yearly basis – once when they release their results for the first half of the year (which is now), and once when they release their results for the second half of the year.

For 1H FY2023, a distribution payout of 5.30 cents/unit was declared. Compared to the distribution payout of 5.22 cents/unit declared in 1H FY2022, it represents a slight improvement by 1.5%, driven by contributions from the newly acquired properties, and the completed asset enhancement at Raffles City Singapore, offset by higher finance costs from the additional borrowings for its acquisitions and increases in interest rates.

If you are a unitholder of the REIT, do take note of the following dates regarding its distribution payout:

Ex-Date: 08 August 2023
Record Date: 10 August 2023
Payout Date: 15 September 2023

CEO Tony Tan’s Comments & Outlook (from the REIT’s Press Release)

“Against a backdrop of global uncertainties, CICT continued to deliver stable financial returns to Unitholders underpinned by a resilient portfolio performance and proactive asset management. We achieved higher committed occupancy rates and positive rent reversions for the office and retail assets.

Looking ahead, we will focus on strengthening our portfolio and optimising the potential of our overseas properties through proactive management. CQ @ Clarke Quay is expected to complete the phased AEI works by late 2H 2023 and will contribute to CICT’s performance in 2024 when the tenants progressively commence operations. Supported by a healthy balance sheet and a robust capital structure, we are well-positioned to implement our portfolio and asset management strategies effectively amidst the macro uncertainties. We will continue to exercise prudence in our capital management and evaluate any organic growth and inorganic opportunities with financial discipline.”

Closing Thoughts

Pretty decent set of ‘report card’ delivered by CICT this time round – with improvements seen in its financial results as a result of contribution from newly acquired properties, portfolio occupancy for all of its property types (retail, office, and integrated development) recording further improvements and having a high occupancy rate of more than 95.0%, and debt profile remaining healthy.

With that, I have come to the end of my review of the blue-chip commercial REIT’s latest results for the 1st half of FY2023. I hope you have found the contents presented in this post useful, and do take note that everything you have just read is purely for educational purposes only. They do not represent any buy or sell calls for the REIT’s units. You are strongly encouraged to do your own due diligence before making any investment decisions.

Related Documents

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

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