CICT reports 0.6% higher net property income to S$275 million on rental growth
Mia Pei
CAPITALAND Integrated Commercial Trust ’s (CICT) net property income (NPI) grew a slight 0.6 per cent on year to S$275 million for the third quarter ended September.
Gross revenue for the quarter rose 4.6 per cent to S$391.3 million, said the manager in a business update on Thursday (Oct 26).
For the three quarters ended September, gross revenue increased 9.8 per cent to S$1.2 billion and NPI rose 6.8 per cent to S$827.3 million.
The growth was led by acquisitions completed in the first half of 2022, as well as higher gross rental income from existing properties.
However, the increase in rental income was offset by a rise in operating expenses, which the manager attributed to increased actual occupancy and shopper traffic.
In its retail portfolio, shopper traffic rose 12.9 per cent for the three quarters on the year, with strong contribution from downtown malls led by tourism recovery, especially by Chinese tourists.
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For the quarter, CICT registered a minor growth in portfolio committed occupancy at 97.3 per cent, 0.6 percentage point higher compared with the second quarter.
Weighted average lease to expiry, which is based on monthly gross rental income and excludes gross turnover rents as at Sep 30, remained at a stable 3.5 years.
The real estate investment trust (Reit) also recorded steady growth in both Singapore’s and Germany’s office markets, leading to a 1 per cent rise in its office portfolio occupancy rate to 96.4 per cent.
Singapore’s office portfolio, in particular, registered a 98 per cent occupancy rate with average rent increasing to S$10.45 per square foot per month.
This was attributable to major new leases signed in Q3, including tenants The Work Project at Capital Tower and CapitaGreen, as well as Pernod Ricard at Six Battery Road.
Additionally, the manager highlighted its “proactive capital management”, with an average debt term to maturity at 4.1 years, as well as an aggregate leverage at 40.8 per cent. This includes proportionate share of borrowings and deposited property values of joint ventures.
As at end-September, the ratio of total gross borrowings to total net assets stood at 71.5 per cent.
Of the S$9.7 billion total borrowings, 78 per cent was with a fixed interest rate.
Assuming a 1 per cent per annum increase in interest rate, the Reit would incur S$21.9 million more interest rate expenses on a full-year basis, computed on floating rate borrowings.
The estimated distribution per unit would therefore be S$0.0033 less, based on the number of units issued at Sep 30.
Units of CICT were trading down 0.6 per cent, or S$0.01, to S$1.69 as at 1.34 pm on Thursday.
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