CICT posts H1 DPU of 5.18 Singapore cents; manager still sees interest for retail space
CAPITALAND Integrated Commercial Trust C38U (CICT), formerly known as CapitaLand Mall Trust, has posted a 75-per-cent increase in distribution per unit (DPU) to 5.18 Singapore cents for the first half ended June 30, from 2.96 cents for the year-ago period.
The increase was largely driven by contribution from CapitaLand Commercial Trust (CCT) assets and 100 per cent contribution from Raffles City Singapore, following the merger with CCT in Q4 2020. The H1 DPU will be paid out on Sept 9.
At a briefing following the release of the results, Tony Tan, chief executive of CICT's manager, said the Reit also sees good demand for its retail spaces.
"Despite the situation we witness on the retail front, we continue to see interest for retailers to look at new store openings, both in downtown and suburban (areas)," he said. "By and large, a lot of retailers still think brick-and-mortar is part and parcel of their entire retail chain and strategy."
Gross revenue for the half-year period more than doubled to S$645.7 million, from S$318.4 million a year ago, on the back of the enlarged portfolio.
Net property income of S$472.2 million was also more than double the S$216.4 million for the year-ago period.
The increase comes despite the granting of S$18.9 million of rental waivers in H1 2021 for tenants affected by Covid-19, the manager said in a bourse filing on Wednesday morning.
"The operational challenges arising from the evolving pandemic situation have affected our business as well as our tenants," said Mr Tan. "In view of persisting market uncertainty, we will continue to be agile and flexible in managing our portfolio."
Distributable income more than trebled to S$335.9 million for the half-year period, from S$109.7 million a year ago.
This was boosted by the absence of the retention of S$46.4 million of income available for distribution in H1 2020, in view of the challenging operating environment due to the Covid-19 pandemic.
CICT's key financial indicators remained healthy, with aggregate leverage at 40.5 per cent as at June 30. The average cost of debt was maintained at 2.4 per cent, while the average term to maturity was 4.3 years.
Meanwhile, its committed portfolio occupancy stood at 94.9 per cent as at June 30. The manager said around a million square feet of new leases and renewals were signed in H1. Some 7.2 per cent of retail leases and 3.9 per cent of office leases by portfolio gross rental income remain due in 2021.
While CICT's retail rental reversion was negative 9.1 per cent for H1 as Covid-19 restrictions weighed on both consumer and retailer sentiment, Mr Tan dismissed the figure as a "lagging" indicator.
The leading indicator, he said, was tenant sales. "If our tenants are able to do so well, improve by 30 to 50 per cent in terms of sales in the new environment, actually we're back to square one for an effective rent basis. That's the way to look at it."
The way Mr Tan sees it, Singapore's improving vaccination rates could be a shot in the arm for the retail sector.
"We are probably in very good shape vis-a-vis countries around the world. That will be a good confidence booster for both foreign investors as well as the local retailers who are thinking about their expansion footprint," he said.
Units of CICT closed 0.48 per cent or S$0.01 higher at S$2.11 on Wednesday.
