CapitaLand Integrated Commercial Trust - OCBC Investment 2024-02-06: A Job Well Done

• CapitaLand Integrated Commercial Trust (SGX:C38U)’s FY23 results ticked most of the boxes for what one would consider a solid showing. 2H23 net property income (NPI) increased 4.0% y-o-y to S$563.6m while DPU inched up 1.7% y-o-y to S$0.0545 such that FY23 DPU rose 1.6% to S$0.1075. This constituted 101.3% of our forecast.
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Robust rental reversions for both retail & office portfolios; unchanged committed occupancy rate

Retail

• Looking first at CapitaLand Integrated Commercial Trust’s retail operations, committed occupancy declined 0.5 ppt q-o-q to 98.5%. However, FY23 rental reversions came in at 8.5%, an acceleration as compared to FY22’s 1.2%. Both suburban malls (+8.3%) and downtown malls (+8.8%) contributed positively to this increase.
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• Occupancy costs stood at a healthy 16.3%. Although shopper traffic increased by a larger magnitude of 8.6%, it is still ~85% of pre-COVID levels.

Office

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OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2024-02-06 SGinvestors.io

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