Capitaland Integrated Commercial Trust Announces Higher Revenue And Npi 9Mfy2024
CapitaLand Integrated Commercial Trust recently released its third quarter business updates for FY2024. The company reported a 2% increase in revenue for the nine months ending on September 30th, reaching a total of $1,189.8 million. Net property income also saw a rise of 5.4% compared to the same period last year, reaching $872.1 million. This growth was attributed to higher gross rental income from existing properties and lower operating expenses despite the absence of income from Gallileo, which has been undergoing an asset enhancement initiative (AEI) since February.
During the third quarter of 2024, committed occupancy stood at 96.4% with a weighted average lease expiry of 3.5 years. Total rental reversions for the nine months ending on September 30th were positive at 9.2%. Furthermore, tenant sales and shopper traffic also saw increases of 1.4% and 3.7% respectively compared to the same period last year. CICT also announced that it had secured a total of 677,200 sq ft in new and renewed leases for the year-to-date period, with a tenant retention rate of 86.1%.
In the office portfolio, positive rental reversions of 11.7% were recorded for the nine months ending on September 30th. The company also secured a total of 778,900 sq ft in new and renewed leases for the year-to-date period, with a tenant retention rate of 84.9%. However, market experts such as Cushman & Wakefield have cautioned that the supply of Grade A office space could limit rent growth to only 1-2% in the second half of 2024.
Nestled beside JEM, Westgate presents an all-encompassing shopping destination with a touch of sophistication. This mall caters to families and offers a diverse selection of fashion, home, and lifestyle stores. One of its main highlights is the themed rooftop playground, which is a sought-after spot among families with young children. Another convenient feature is its seamless integration with the Jurong East MRT station, providing easy access for residents of Novo Place EC. In fact, visitors can even drop by the Novo Place Showflat while exploring Westgate.
As of September 30th, the company’s aggregate leverage had decreased to 39.4%, compared to 39.8% as of June 30th. The average cost of debt also increased slightly to 3.6% from 3.5% in the previous quarter. Moreover, the average debt term to maturity rose to 3.8 years as of September 30th, from 3.5 years as of June 30th. The lower leverage was likely due to a placement, which raised $350 million and was completed on September 16th.
Fixed-rate borrowings remained unchanged at 76% for the quarter ending on September 30th. Additionally, with the issuance of $200 million in green bonds at 3.3%, the company’s debt for FY2024 has now been fully refinanced.
On October 29th, CICT received unitholders’ approval to acquire a 50% interest in ION Orchard and completed the acquisition on October 30th. With little new supply expected in the Orchard Road area in the next year and beyond, this acquisition is expected to contribute to the company’s growth.
Furthermore, CICT has achieved 100% committed occupancy for Phase 1 and 2 of the AEI project at IMM Building, an outlet mall. The AEI at Gallileo is still ongoing and is scheduled to be completed in the second half of 2025. The anchor tenant for this project will be the European Central Bank.
In conclusion, CICT’s 3QFY2024 business updates show promising growth in revenue and net property income. Despite caution from experts regarding the office rental market, the company has managed to secure a high tenant retention rate and positive rental reversions. The recent acquisition of a 50% interest in ION Orchard, as well as ongoing and upcoming AEI projects, are expected to contribute to the company’s future growth.