CapitaLand Integrated Commercial Trust - RHB Invest 2024-02-07: Riding On Singapore’s Resilience & Recovery; BUY

• CapitaLand Integrated Commercial Trust (SGX:C38U)’s 2H/FY23 results were in line. Portfolio metrics are expected to stay firm this year after a strong FY23.
• Key catalyst is potential divestment of Singapore assets, which will strengthen balance sheet and position for acquisition of higher-quality assets from sponsor.
• - Read this at SGinvestors.io -

Rent reversions to stay in positive mid-single digit in FY24

• Rent reversions to stay in positive mid-single digit in FY24 for the office and retail portfolios. This comes after a strong FY23, where the office and retail portfolios registered healthy rent reversions of ~9%, with a much stronger 4Q.
• Office portfolio occupancy rose 0.3ppts q-o-q to 96.7% but is expected to decline in 1Q with the exit of Commerzbank at Gallileo at end-January. WeWork, its second largest tenant (~2.4% of total rent) has been prompt in rental payments and management currently sees no major concerns.

Divestments likely a key catalyst

• - Read this at SGinvestors.io -
• CapitaLand Integrated Commercial Trust's gearing has edged lower to 39.9% (9M23: 40.8%) on the back of valuation gains, with management noting ~37% as a comfortable level in the current market.

Gallileo is expected to undergo major upgradation

• Read more at SGinvestors.io.

Vijay Natarajan RHB Securities Research | https://www.rhbgroup.com/ 2024-02-07 SGinvestors.io

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