Do you know that CapitaLand Integrated Commercial Trust (SGX: C38U) is the first and largest listed REIT on the Singapore Exchange?

The REIT debuted under the name ‘CapitaLand Mall Trust’ back in July 2002, where it invests in the various CapitaLand retail malls in Singapore, before a merger with ‘CapitaLand Commercial Trust’ (which is an office REIT with its portfolio comprising of properties in Singapore and Germany) in November 2020 was completed and the enlarged REIT was subsequently renamed to ‘CapitaLand Integrated Commercial Trust’, or CICT for short.

As of 31 December 2024, CICT’s portfolio comprises 26 properties, of which 21 are in Singapore, 2 are in Frankfurt, Germany, and the remaining 3 are in Sydney, Australia, with a total property value of S$26.0 billion.

It is also the 2nd of the 3 CapitaLand REITs and business trust in my investment portfolio to release its results this morning (5 February) – with the first being CapitaLand India Trust last Monday (you can read my review here), and CapitaLand Ascendas REIT will be releasing its results tomorrow evening.

One of the most recent developments by CICT is its acquisition of a 50.0% interest in ION Orchard, an iconic 8-storey retail mall along the Orchard Road shopping belt, which boasts a diverse mix of approximately 300 international and local brands across luxury and necessity retail segments, and a committed occupancy rate of 96% as of 30 June 2024 – with the announcement first announced in September 2024, and the acquisition completed in November 2024.

In this post, you will find my review of CICT’s latest financial performance, portfolio occupancy and debt profile, and its distribution payout to unitholders:

Financial Performance (2H FY2023 vs. 2H FY2024, and FY2023 vs. FY2024)

In this section, you’ll find a review of CICT’s financial performance recorded for the 2nd half of FY2024, as well as for FY2024, compared against that reported in the respective time periods a year ago:

2H FY2023 vs. 2H FY2024:

2H FY20232H FY2024% Variance
Gross Revenue
(S$’mil)
$785.2m$794.4m+1.2%
Property Operating
Expenses (S$’mil)
$221.6m$223.3m+0.8%
Net Property
Income (S$’mil)
$563.6m$571.1m+1.3%
Distributable Income
to Unitholders (S$’mil)
$362.5m$385.7m+6.4%

My Observations: CICT reported a stable growth in its financial results for the 2nd half of FY2024 compared to a year ago – with its gross revenue and net property income up by a low-single digit percentage, and distributable income up by a mid-single digit percentage.

For its gross revenue, the 1.2% year-on-year improvement to S$794.4 million can be attributed to improved performance from its existing properties, partially offset by the absence of revenue contribution from Gallileo (in Germany) due to the commencement of asset enhancement works from February 2024, and divestment of 21 Collyer Quay in November 2024.

Property operating expenses inched up by 0.8% compared to last year to S$233.3 million from higher property tax.

Finally, the 6.4% year-on-year increase in CICT’s distributable income to unitholders to S$385.7 million can be attributed to the acquisition of a 50% interest in ION Orchard, better performance from existing properties, and prudent management of operating and interest costs, partially offset by the divestment of 21 Collyer Quay.

FY2023 vs. FY2024:

FY2023FY2024% Variance
Gross Revenue
(S$’mil)
$1,560.0m$1,586.4m+1.7%
Property Operating
Expenses (S$’mil)
$444.0m$432.9m-2.5%
Net Property
Income (S$’mil)
$1,116.0m$1,154.5m+3.4%
Distributable Income
to Unitholders (S$’mil)
$715.7m$752.2m+5.1%

My Observations: For the full year, CICT’s financial performance was also a stable one, with low- to mid-digit percentage improvements recorded in its gross revenue, net property income, and distributable income to unitholders.

Gross revenue was 1.7% higher year on year at S$1,586.4 million from improved performance from existing properties, partially offset by the absence of revenue contribution from Gallileo due to the commencement of asset enhancement works from February 2024 [works are currently in progress with targeted phased handover to European Central Bank from 2H FY2025], and the divestment of 21 Collyer Quay in November 2024.

Property operating expenses was down by 2.5% year on year to S$432.9 million from lower property management reimbursements under the new property management agreement and lower utilities, partially offset by higher property tax.

The 5.1% year-on-year increase in CICT’s distributable income to unitholders to S$752.2 million can be attributed to the REIT’s acquisition of a 50.0% interest in ION Orchard, improved performance in its existing properties, as well as prudent management of operating and interest costs, partly offset by the divestment of 21 Collyer Quay.

Portfolio Occupancy Profile (3Q FY2023 vs. 4Q FY2024)

Over the quarters, CICT has maintained a very strong portfolio occupancy profile, with the occupancy rates of its retail, office, and integrated development properties maintained at around 95% or higher, with its lease expiries well-spread out (in that there’s no one single year where there is a huge percentage of leases due for renewal).

Has this trend managed to continue?

Let us find out in the table below, where you’ll find a comparison of the REIT’s portfolio occupancy recorded for the current quarter under review (i.e., 4Q FY2024 ended 31 December 2024) compared against that reported in the previous quarter 3 months ago (i.e., 3Q FY2024 ended 30 September 2024):

3Q FY20234Q FY2024
Portfolio Occupancy
(Retail) (%)
99.0%99.3%
Portfolio WALE
(Retail) (by GRI – years)
2.0 years2.0 years
Portfolio Occupancy
(Office) (%)
94.6%94.8%
Portfolio WALE
(Office) (by GRI – years)
3.8 years3.7 years
Portfolio Occupancy
(Integrated Development) (%)
98.2%98.9%
Portfolio WALE
(Integrated Development)

(by GRI – years)
4.6 years4.5 years

My Observations: The occupancy rates of CICT’s retail, office, and integrated development properties all improved compared to the previous quarter.

In terms of rental reversion, it was at a positive 8.8% for retail and a positive 11.1% for office leases.

Also, CICT’s top 10 tenants contribute just 16.9% towards the REIT’s total gross revenue, with its top tenant (in RC Hotels (Pte) Ltd) contributing 4.9% (and the remaining tenants contributing no more than 1.7%).

As far as lease expiries are concerned, they are well-spread out – with an average of 15.6% of retail leases and 6.5% of office leases due for renewal each year between FY2025 and FY2027 (a period of 3 financial years), with the remaining leases due for renewal only in FY2028 or later.

Debt Profile (3Q FY2024 vs. 4Q FY2024)

Apart from having a strong set of occupancy figures, CICT also has a healthy debt profile – with its aggregate leverage maintained at just under 40% throughout the quarters.

Similar to how I have reviewed its portfolio occupancy profile in the previous section, in the table below, you’ll find a comparison of CICT’s debt profile for the current quarter under review (i.e., 4Q FY2024 ended 31 December 2024) against that reported in the previous quarter 3 months ago (i.e., 3Q FY2024 ended 30 September 2024) to find out if it has continued to remained at healthy levels:

3Q FY20244Q FY2024
Aggregate Leverage
(%)
39.4%38.5%
Interest Coverage
Ratio (times)
3.0x3.1x
Average Term to
Debt Maturity (years)
3.8 years3.9 years
Average Cost of
Debt (%)
3.6%3.6%
% of Borrowings Hedged
to Fixed Rates (%)
76%81%

My Observations: It was an improved set of statistics reported by CICT – with improvements seen in its aggregate leverage (not only that, it is also at a healthy level), interest coverage ratio, and percentage of borrowings hedged to fixed rates.

Debt maturity over the next few years are also rather evenly spread out – between FY2025 and FY2030 (a period of 6 financial years), it has between 10% and 19% of borrowings due for refinancing each year, with the remaining 15% of borrowings due for refinancing only in FY2031 or later.

Distribution Payout to Unitholders

The management of CICT declares a distribution payout to the unitholders on a semi-annual basis.

Hence, in the 2 tables below, you’ll find its distribution payout for the 2nd half of FY2024 (for the period between 1 July and 31 December 2024), as well as for the full year 2024 (for the period between 1 January and 31 December 2024), compared against its distribution payout declared for the respective periods a year ago:

2H FY2023 vs. 2H FY2024:

2H FY20232H FY2024% Variance
Distribution Per
Unit (S$’cents)
5.45 cents5.45 cents

Even though the REIT’s distributable income to unitholders rose by 6.4% year on year, but its distribution per unit was the same as last year due to an enlarged unit base.

Also, do take note that, as an advanced distribution of 2.16 cents for the period between 1 July and 11 September 2024 prior to the preferential offering exercise for the acquisition of ION Orchard has already been made on 17 October 2024, you’ll only receive 3.29 cents for the period between 12 September and 31 December 2024 this time round.

FY2023 vs. FY2024:

FY2023FY2024% Variance
Distribution Per
Unit (S$’cents)
10.75 cents10.88 cents+1.2%

If you are a unitholder of CICT, do take note of the following dates on the payout of the distribution for 2H FY2024:

Ex-Date: 12 February 2025
Record Date: 13 February 2025
Payout Date: 21 March 2025

CICT’s Management’s Comments and Outlook (from the REIT’s Press Release)

Chairperson Ms Teo Swee Lian:

“CICT’s positive performance in FY 2024 reflects its portfolio strength, bolstered by the timely acquisition of the iconic destination mall ION Orchard and the divestment of 21 Collyer Quay, despite market uncertainties. We are grateful to unitholders for their support in the successful equity fund raising, which enabled us to complete the acquisition. In addition, the divestment of 21 Collyer Quay allowed CICT to recycle proceeds to repay debt, reducing aggregate leverage and providing CICT with greater financial flexibility to fund future growth opportunities. These strategic moves reinforce CICT’s leadership position as we expand our footprint in Singapore’s downtown core and strengthen our presence in the city, which now accounts for 94.5% of CICT’s portfolio property value. Moving forward, we will remain focused on Singapore as we enhance our portfolio resilience and create greater value for unitholders.”

CEO Mr Tony Tan:

“CICT achieved commendable results in FY 2024, leveraging our strong portfolio management to navigate headwinds from a high cost environment and capture demand in the retail and office sectors. Our proactive leasing efforts and active tenant engagement resulted in a high overall portfolio occupancy of 96.7%, high tenant retention rate of above 80% and positive rent reversions for the Singapore portfolio. We will continue to prioritise leasing initiatives to retain tenants and attract new ones.

We are strengthening the market positioning of our assets in Singapore, Australia and Germany through asset enhancement initiatives (AEIs). The completed AEI at 101 Miller Street in Australia has garnered positive tenant feedback, while the ongoing AEIs at IMM Building in Singapore and Gallileo in Germany are on track for completion in 2H 2025 with high committed occupancies. We will continue to review our asset plans to future-proof our portfolio on an ongoing basis.

In 2025, we remain committed to driving sustainable growth through active portfolio management and disciplined cost and capital management. We will also continue to capitalise on growth opportunities while staying agile and responsive to market changes.”

Closing Thoughts

Pretty decent set of results reported by Singapore’s largest REIT in CICT – with its financial performance reporting a stable single-digit percentage growth (both for the 2nd half, as well as for the full year).

Occupancy rates of its properties are also maintained at a high level of above 94.8% (for its retail, office, and integrated development properties), with positive rental reversions reported and lease expires well-spread out.

As a result of the REIT paring down its borrowings with proceeds from the divestment of 21 Collyer Quay, CICT’s aggregate leverage fell to 38.5% for the year – which is a healthy level. Its debt maturity over the next few years is also well-staggered.

Finally, as far as distribution payouts are concerned, over the last 5 years, it has reported stable improvements every single year except for FY2020 (due to the Covid-19 pandemic), which is pretty remarkable in my opinion.

With that, I have come to the end of my review of CICT’s latest results for the 2nd half, as well as for the full year ended 31 December 2024. Do note that all opinions expressed in this post are mine which I’m sharing for educational purposes only. They do not constitute 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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