Capitaland Integrated Commercial Trust Announces Higher Revenue And Npi 9Mfy2024
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The CapitaLand Integrated Commercial Trust (CICT) reported a 2% increase in revenue for the nine months ended September 30, 2024, reaching $1,189.8 million in its third quarter business updates. Net property income (NPI) also saw a 5.4% year-on-year growth to $872.1 million during the same period, mainly due to higher rental income and lower operating expenses. However, the absence of income from Gallileo, which is currently undergoing an asset enhancement initiative (AEI) since February, also contributed to the increase in NPI.
As of the third quarter of 2024, the committed occupancy for all properties within CICT stood at 96.4%, with a weighted average lease expiry of 3.5 years. Total rental reversions for the first nine months of the year were positive at 9.2%. The tenant sales also showed a growth of 1.4% year-on-year, while shopper traffic increased by 3.7%. CICT also successfully achieved a tenant retention rate of 86.1%, with a total of 677,200 square feet of new and renewed leases year-to-date till September 30.
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The office portfolio performed exceptionally well, with a positive reversion of 11.7% during the first nine months of 2024. CICT also achieved a tenant retention rate of 84.9% with a total of 778,900 square feet of new and renewed leases during the same period. This is despite concerns from consultants like Cushman & Wakefield regarding the potential oversupply of Grade A office space, which may limit rent growth to 1% to 2% in the second half of 2024.
As of September 30, the aggregate leverage for CICT had decreased to 39.4%, compared to 39.8% as of June 30. The average cost of debt had also increased slightly to 3.6%, while the average debt term to maturity was 3.8 years, both compared to the previous quarter. The decrease in leverage can be attributed to the successful placement of $350 million, which was completed on September 16.
In terms of debt structure, 76% of CICT’s borrowings remained on fixed rates as of September 30. The recent issuance of $200 million worth of green bonds, with a rate of 3.3%, has fully refinanced CICT’s debt for the fiscal year 2024.
At the EGM held on October 29, unitholders of CICT approved the acquisition of a 50% interest in ION Orchard. The acquisition was completed on October 30, and with very little new supply expected in the Orchard Road area in the next year, it is expected to further boost CICT’s performance. Additionally, CICT also achieved 100% committed occupancy for Phase 1 and 2 of the AEI at IMM Building, an outlet mall. The AEI at Gallileo is still ongoing and is scheduled to be completed in the second half of 2025, with the European Central Bank set to be the anchor tenant.
In conclusion, despite the challenges posed by the ongoing AEI at Gallileo and potential oversupply of office space, CICT has shown strong financial performance and strategic acquisitions that will contribute to its long-term growth.