CapitaLand Integrated Commercial Trust - CGS-CIMB Research 2023-10-27: Cautious Optimism

• In its 3Q23 business update, CapitaLand Integrated Commercial Trust (SGX:C38U) reported a 4.6% y-o-y increase in 3Q revenue to S$391.3m (9M23 was 77.5% of our FY23 full-year forecast). 3Q23 NPI rose by a smaller 0.6% to S$275m due to a rise in operating expenses on the back of higher occupancy and shopper traffic.

Portfolio committed occupancy rose to 97.3%

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• Portfolio committed occupancy rose 0.6% pt q-o-q to 97.3% in 3Q23 (from 96.7% in 2Q23).
• Aggregate leverage stood at 40.8% with average cost of debt at 3.3% as at 3Q23. CapitaLand Integrated Commercial Trust's management guided that average funding cost could trend up towards 3.5% to high 3% level in FY24F.

Downtown retail properties benefit from higher sales and footfall

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• Downtown malls benefited from higher tourist arrivals, from the resumption of travel by Chinese tourists, and local consumption. CapitaLand Integrated Commercial Trust remains optimistic on its retail segment and anticipates retail rents to continue rising for the rest of 2023F, driven by limited supply and more inbound tourists.
• In terms of AEI, works at CQ @ Clarke Quay are scheduled to be completed by end-2023, with the handover of the units to tenants progressively from mid-Oct 2023.

Office segment delivered strong occupancy

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LOCK Mun Yee CGS-CIMB Research | Natalie ONG CGS-CIMB Research | https://www.cgs-cimb.com 2023-10-27 SGinvestors.io

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