CapitaLand Integrated Commercial Trust - OCBC Investment 2024-09-04: Sizeable Acquisition With Expected Accretion To DPU

• CapitaLand Integrated Commercial Trust (CICT, SGX:C38U) has proposed to acquire a 50.0% interest in ION Orchard (includes ION Orchard, ION Orchard Link, ION Art Gallery and ION Sky) from its sponsor, CapitaLand Investment (SGX:9CI), for an agreed property value of S$1,848.5m (50% basis).

About ION Orchard

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• There is also room for improvement to this, as current committed occupancy of ION Orchard is at ~96%, as at 30 Jun 2024, while we believe rents at Orchard Road malls can maintain its uptrend in a soft landing environment.

Proposed acquisition to be mainly funded by equity fund raising via private placement and PO to raise~S$1.1b

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• The preferential offering (PO) issuance price will be S$2.007, or a discount of 5.8% to its last closing price prior to CICT's announcement. Total proceeds from the private placement and PO will be ~S$1.1b, with 549.0m new CICT units to be issued.

CICT will also inherit 50% of the secured bank loan held by the entity that holds ION Orchard. The existing bank loan is in the midst of undergoing a refinancing exercise, and CICT said that the new 3.5-year debt will carry a borrowing cost in the high-3% level.

DPU accretive on proforma basis with aggregate leverage expected to remain stable

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OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2024-09-04 SGinvestors.io

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