Following CapitaLand Integrated Commercial Trust’s business update earlier in the morning (in case you’ve missed out, you can check it out here), CapitaLand India Trust is the 2nd of the 3 CapitaLand REITs I have in my long-term investment portfolio to make available its Q3 business update after market hours this evening (26 October). The other CapitaLand REIT I have, CapitaLand Ascendas REIT, will be releasing its Q3 business update after market hours tomorrow (27 October).
CapitaLand India Trust (SGX:CY6U), or CLINT for short, was the latest addition to my long-term investment portfolio at S$1.02 back in May (when I made the addition, I shared about reasons for the move, and you can read about it here).
As the name implies, the business trust focuses on income producing properties in India, and CLINT is the first Indian property trust in Asia. Currently, its portfolio comprises 9 world-class IT business parks, 1 logistics park, 1 industrial facility, and 4 data centre developments in India, with a total assets under management of S$2.7 billion.
CapitaLand India Trust have also shifted to reporting its full financial results on a half-yearly basis. Hence, for the current quarter under review, it only provided a summary of the key financial figures, which we will be looking at in this post, together with its portfolio occupancy and debt profile.
Let’s get started…
Key Financial Figures (Q3 FY2022 vs. Q3 FY2023, and 9M FY2022 vs. 9M FY2023)
In this section, we will be looking CapitaLand India Trust’s key financial figures for the 3rd quarter (i.e., Q3 FY2022 vs. Q3 FY2023), as well as for the first 9 months of the financial year (i.e., 9M FY2022 vs. 9M FY2023):
Q3 FY2022 vs. Q3 FY2023:
| Q3 FY2022 | Q3 FY2023 | % Variation | |
| Total Property Income (S$’mil) | $53.5m | $61.0m | +14.0% |
| Total Property Expenses (S$’mil) | $12.0m | $14.3m | +19.2% |
| Net Property Income (S$’mil) | $41.5m | $46.7m | +13.0% |
My Observations: Overall, I felt it was a decent set of results reported by the business trust, as its total property income and net property income saw double-digit percentage growths in SGD terms.
In Indian Rupee terms, its total property income was up by 23% (from ₹3,041m in Q3 FY2022 to ₹3,752m in Q3 FY2023), while its net property income was up by 22% (from ₹2,358m in Q3 FY2022 to ₹2,874m in Q3 FY2023) – both very impressive performance in my opinion.
The growth in its total property income can be attributed to income contribution from ITPH Block A and ITPP-H. However, due to an increase in total property expenses (by 19.2%), its net property income grew at a slower pace at 13.0%, but still good nonetheless.
9M FY2022 vs. 9M FY2023:
| 9M FY2022 | 9M FY2023 | % Variation | |
| Total Property Income (S$’mil) | $156.8m | $171.5m | +9.4% |
| Total Property Expenses (S$’mil) | $31.9m | $39.2m | +22.9% |
| Net Property Income (S$’mil) | $124.9m | $132.3m | +5.9% |
My Observations: On a 9-month basis, CapitaLand India Trust’s total property income and net property income also saw a decent growth in Singapore Dollar terms – in Indian Rupee terms, its total property income was up by 20% (from ₹8,798m in 9M FY2022 to ₹10,547m in 9M FY2023), while its net property income was up by 16% (from ₹7,006m in 9M FY2022 to ₹8,139m in 9M FY2023).
The improvement recorded in its total property income was due to higher occupancy and income contribution from ITPH Block A and ITPP-H which were completed and acquired in January 2023 and May 2023 respectively.
However, as a result of a higher percentage jump in its total property expenses (by 22.9%) compared to the percentage climb in its total property income (by 9.4%), its net property income saw a slightly lower percentage improvement (by 5.9%).
Portfolio Occupancy Profile (Q2 FY2023 vs. Q3 FY2023)
Moving on, let us take a look at CLINT’s portfolio occupancy profile, where I will be comparing the stats reported for the 3rd quarter of FY2023 (ended 30 September) against that reported in the previous quarter 3 months ago (i.e., Q2 FY2023 ended 30 June), as follows:
| Q2 FY2023 | Q3 FY2023 | |
| Portfolio Occupancy (%) | 94.0% | 92.0% |
| Portfolio WALE (years) | 3.5 years | 3.5 years |
My Observations: While portfolio occupancy dipped by 2.0 percentage points to 92.0% as a result of a drop in occupancy in ITPB (from 96% in Q2 FY2023 to 95% in Q3 FY2023), ITPH Excluding Block A (from 97% in Q2 FY2023 to 86% in Q3 FY2023), aVance Hyderabad (from 84% in Q2 FY2023 to 74% in Q3 FY2023). That said, apart from CyberValue (which have an occupancy of 78%) aVance Hyderabad (which have an occupancy of 74%) and Building Q1 (which have an occupancy of 62%), the remaining properties have an occupancy rate of at least 85%.
On the business trust’s lease expiry profile, only 3% of leases are due for renewal in the final quarter of FY2023. In FY2024, 16% of the leases are due for renewal, with another 8% of leases due for renewal in FY2025, and 19% due for renewal in FY2026. The remaining 53% of the leases are only due for renewal in FY2027 and beyond.
Debt Profile (Q2 FY2023 vs. Q3 FY2023)
Just like how I have reviewed the business trust’s portfolio occupancy profile in the previous section, I will also be reviewing its debt profile by comparing the statistics reported in the current quarter under review (i.e., Q3 FY2023) against that reported in the previous quarter 3 months ago (i.e., Q3 FY2022) to find out if it has continued to remain healthy:
| Q2 FY2023 | Q3 FY2023 | |
| Aggregate Leverage (%) | 40.0% | 37.0% |
| Interest Coverage Ratio (times) | 2.7x | 2.6x |
| Average Cost of Debt (%) | 6.3% | 6.3% |
| % of Borrowings Hedged to Fixed Rates (%) | 73% | 71% |
My Observations: Looking at its debt profile, it is more or less the same compared to the previous quarter – its aggregate leverage of 37.0% is a healthy one.
However, its percentage of borrowings hedged to fixed rates, at 71%, is a bit on the low side, meaning to say the remaining 29% of unhedged borrowings may be exposed to the high borrowing costs due to the high interest rate environment we are in currently.
Finally, on debt maturity, CLINT has 29.6% (or S$382.6m) of borrowings due for refinancing in the final quarter of FY2023. In the coming financial years ahead, 11.3% (or S$145.9m) of borrowings will be due for refinancing in FY2024, 14.6% (or S$188.4m) of borrowings will be due for refinancing in FY2025, 24.9% (or S$322.0m) of borrowings will be due for refinancing in FY2026, and the remaining 19.6% (or S$255.0m) of borrowings will be due for refinancing in FY2027 and beyond.
Closing Thoughts
Personally, I felt it was a stable set of results reported by CLINT – in terms of its financial performance (where both its total property income and net property income recording double digit percentage increases in Q3; as for the first 9 months of the financial year, the growth was at high single digit percentage for the former, and mid single digit for the latter), portfolio occupancy (which continue to remain resilient at 92%), and debt profile (where its aggregate leverage is at a healthy level of 37%).
Finally, as the management of CapitaLand India Trust declares a distribution on a half-yearly basis (once when they release their 2nd quarter results, and once when they release their 4th quarter results), no distribution was declared for the current quarter under review.
With that, I have come to the end of my review of CLINT’s latest 3rd quarter business update. Hope you have found the contents presented in this post useful, and do note that everything you have just read above is purely for educational purposes only, and they do not represent any buy or sell calls for the business trust. You should always 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 India Trust.
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