CapitaLand Integrated Commercial Trust - Recovery Surpassing Pre-COVID

CapitaLand Integrated Commercial Trust - DBS Research 2022-10-25: Recovery Surpassing Pre-COVID

CapitaLand Integrated Commercial Trust - Recovery Surpassing Pre-COVID

SGinvestors.io

Published: 2022-11-05 08:38 AM

CAPITALAND INTEGRATED COMM TR (SGX:C38U)

See CapitaLand Integrated Commercial Trust's announcement dated 21 Oct 2022 for its 3QFY22 business update:
- Revenue and NPI grew 14% and 13% respectively, in line.
- Gearing inched up to 41.2% vs 40.6% in 2Q22 and average cost of debt increased marginally to 2.5% vs 2.4% in 2Q22. Hedging ratio relatively stable at 80% and based on CapitaLand Integrated Commercial Trust’s sensitivity, a 100bps increase in floating rates would impact DPU by 0.30 cents (~3%).
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Singapore office occupancy had the highest improvement, +3.1ppts to 96% from 92.9% in 2Q22 while Germany and Australia’s portfolio occupancy were relatively stable. Six Battery Road’s committed occupancy increased to 91.2% vs 87.4% in 2Q22. Occupancies at other Singapore office assets continue to inch up with CapitaSpring at full occupancy (99.9%), Asia Square Tower 2 at 99.5% and Capital Tower at 90.7% (vs 77% in 2Q22) as the remaining pending leases were completed in 3Q22.
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21 Collyer Quay, which is fully leased to WeWork, officially opened on 6 Sept.
9M22 office reversions remained strong at 7.9% but moderated q-o-q. Singapore office reversions remained strong but appears to have moderated to ~6% in 3Q22 vs 9% in 1Q22. Office average rents remained stable at S$10.52 psf.
Estimated 3Q22 retail reversions have turned marginally positive led by suburban malls (+1.2%). Despite downtown malls still recording negative reversions, this has narrowed to -1.3% (estimated) in 3Q22 vs -4.2% in 2Q22.
9M22 tenant sales psf has surpassed 2019 levels. Tenant sales continue to improve with 9M22 recording +21.3% y-o-y vs +15.9% y-o-y in 1H22. Suburban malls continue to trend upwards (9M22: +10.7% y-o-y) while downtown malls saw stronger recovery trajectory. Shopper traffic saw similar trends.
CapitaLand Integrated Commercial Trust expects to raise service charge from Jan 23 to partially offset higher cost especially utility costs.