CICT’s net property income up 12.7% in Q3 2022, driven by performance of office assets

THE net property income of CapitaLand Integrated Commercial Trust (CICT) went up by 12.7 per cent year-in-year to S$273.3 million in the third quarter of 2022 ending on Sep 30, said the trust in a business update filed on the Singapore Exchange on Friday (Oct 21).

Gross revenue over the same period went up 13.7 per cent to S$374.1 million. The overall occupancy rate of its portfolio rose to 95.1 per cent at the end of Sep 30, up from 93.8 per cent three months before.

Both increases in gross revenue and net property income were driven by the better performance of CICT office assets.

The net property income of office assets went up to S$95.4 million in the third quarter, compared to S$74.7 million in the same period last year, while gross revenue increased from S$97.3 million to S$126.1 million over the same period.

Rent reversion for office assets in Singapore, which were based on average incoming committed rents versus average outgoing rents, also went up 7.9 per cent from the beginning of this year to Sep 30, with an occupancy rate of 96 per cent. Office rent in Singapore averaged S$10.52 per sq ft as at Sep 30 this year.

Performance of CICT retail assets also saw slight improvements, with its net property income going up to S$99.9 million in the third quarter from S$97.7 million a year ago.

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Gross revenue also increased to S$139.5 million from S$136.6 million over the same period. The occupancy rate stood at 96.8 per cent as at Sep 30.

From the beginning of the year till Sep 30, rent reversion for retail spaces went up 0.6 per cent. Tenants’ sales per sq ft went up 21.3 per cent year-on-year during this period and surpassed pre-Covid levels in 2019.

CICT said that there was strong positive office net absorption (0.56m sq ft) in this quarter, surpassing the total take-up (0.32m sq ft) for the whole of 2021. The main demand drivers were expansions by technology firms, flexible workspace operators and non-banking financial companies.

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Growth in office rentals is likely to remain positive in 2023 due to limited new supply beyond that year, barring a sustained recession.

CICT said that leasing activity in its retail assets started to pick up in third quarter of 2022 with demand primarily driven by food and beverage operators.

While retail rents in downtown malls registered slight recovery, the suburban market continued to outperform. Its also cited CBRE Research that overall retail rents is expected to continue recovering for the rest of 2022 and into 2023.