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CapitaLand Integrated Commercial Trust - OCBC Investment 2022-02-03: Continuing Its Portfolio Reconstitution

CAPITALAND INTEGRATED COMM TR (SGX:C38U) | SGinvestors.io CAPITALAND INTEGRATED COMM TR (SGX:C38U)

CapitaLand Integrated Commercial Trust - Continuing Its Portfolio Reconstitution




CICT's 2H21 and FY21 results met our expectations

  • CapitaLand Integrated Commercial Trust (CICT, SGX:C38U) reported 2H21 gross revenue of S$659.4m and NPI of S$478.9m, representing an increase of 54.5% and 61.6% y-o-y, respectively. DPU fell 8.9% y-o-y to 5.22 cents, but this was due to one-off distributions released in 2H20 from income previously retained and from RCS Trust. Excluding this, we estimate that 2H21 DPU would have grown 16.2% y-o-y instead.
  • For the full-year FY21, CapitaLand Integrated Commercial Trust’s NPI jumped 85.5% to S$951.1m, while DPU grew 19.7% to 10.40 cents and accounted for 100.2% of our forecast, in-line with expectations. The main growth driver was due to significantly reduced tenant waivers to eligible tenants, which amounted to S$27.3m in FY21, versus S$128.4m in FY20.


Continued recovery in operating metrics

  • CapitaLand Integrated Commercial Trust’s retail portfolio continued to see a recovery in operating metrics. While rental reversions remained negative overall at -3.2% (based on incoming average rents versus outgoing average rents) in FY21, this was an improvement as compared to 9M21 (-3.8%), while its suburban malls recorded positive rental reversions of 0.2%. The drag was unsurprisingly due to CapitaLand Integrated Commercial Trust’s downtown malls (-7.7%).
  • Management expects to see further improvement on the rental reversions front in FY22. FY21 tenants’ sales psf was down 0.2% versus FY20, and has recovered to 87.8% of FY19 monthly average levels.
  • For CapitaLand Integrated Commercial Trust’s office portfolio, occupancy declined 1.1 percentage point to 91.5%, but average rents for its Singapore office assets have trended upwards. Vacancies in its office assets are also being backfilled, with optimism for positive rental reversions in FY22.

Portfolio reconstitution via capital recycling






OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2022-02-03
SGX Stock Analyst Report BUY MAINTAIN BUY 2.44 DOWN 2.510



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