On 5 February 2025, CapitaLand Integrated Commercial Trust (“CICT”) announced their full year result for FY2024. There were no significant changes noted in the financial update, with DPU remaining relatively stable when compared to the first half of FY2024. This is a good trend for now, given that many REITs have seen DPU decreases over the last few quarters. For more clarity on the overall contribution of acquisitions and divestments that occurred during this half of the year, investors can look forward to the next financial update to see the results in FY2025.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
Website: Financial Statements And Related Announcement::Full Yearly Results
Photo source: https://fifthperson.com/cmt-cct-merger-pros-cons/
Financial Highlights
Distribution Per Unit (“DPU”)
| Metrics | Current | Previous |
|---|---|---|
| Distribution Per Unit | +0.4% | +2.5% |
| Rating | Favorable | Favorable |
DPU for the second half of FY2024 increased by 0.4% to SGD0.0545 per unit from SGD0.0543 per unit for the first half of FY2024. The metric is Favorable as CICT was able to maintain DPU despite rising costs.
Occupancy
| Metrics | Current | Previous |
|---|---|---|
| Occupancy | 96.7% | 96.4% |
| Rating | Favorable | Favorable |
Occupancy rate improved slightly to 96.7% as of 31 December 2024. The metric remains Favorable as it is above my expected healthy occupancy rate of 95%.
Gearing ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing Ratio | 38.5% | 39.4% |
| Rating | Neutral | Neutral |
Gearing ratio decreased slightly to 38.5% as of 31 December 2024. The metric remains Neutral as it is still close to my threshold of 40.0%.
Interest coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest Coverage | 3.1x | 3.0x |
| Rating | Favorable | Favorable |
The interest coverage improved slightly to 3.1 times as of 31 December 2024. The metric remains Favorable as the interest coverage is at my preference of 3.0 times. The Group did not issue any hybrid securities; therefore, the adjusted interest coverage is the same as interest coverage.
Debt maturity profile
| Metrics | Current | Previous |
|---|---|---|
| Debt Maturity Profile | 3.9 years | 3.8 years |
| Rating | Favorable | Favorable |
Weighted average term to maturity of their debt has extended slightly to 3.9 years as of 31 December 2024. The metric remains Favorable and it allows them sufficient time to refinance their debts as they fall due. Do note that 22% of their debt due to mature in the next 2 financial years.
Price to Book Ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 0.93 | 0.92 |
| Rating | Favorable | Favorable |
The Price to Book (“P/B”) ratio currently stands at 0.93. This is computed using the closing share price of SGD1.97 on 28 February 2025 and the net asset value per share of SGD2.12 as of 31 December 2024. The metric is Favorable as investors will be paying at book value for a REIT with a strong sponsor.
As of 28 February 2025, the Market Capitalization is approximately SGD14,378 million.
Website: Yahoo Finance: CapitaLand Integrated Commercial Trust (C38U.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 1.67% | SGD 0.033 |
| 2024 | 6.62% | SGD 0.130 |
| 2023 | 5.41% | SGD 0.107 |
| 2022 | 2.84% | SGD 0.056 |
| 2021 | 5.97% | SGD 0.118 |
| 2020 | 3.10% | SGD 0.061 |
With the rights issuance in September 2024, CICT have given an additional distribution of SGD0.0216 per share for the existing holders in October 2024. Therefore, the amount to be paid out in March 2025 is not the full amount for the second half of FY2025. For a better estimation, we will use the dividend paid out for the calendar year 2024 from operations, which amounts to SGD0.1084 per share.
With a closing share price of SGD1.97 on 28 February 2025, this translates to a dividend yield of 5.50%. For my benchmark, a general reasonable yield would be around 5.25%. CICT’s dividend yield is above my benchmark and is Favorable.
Website: Reasonable Dividend Yield 2025Q1 – 5.25%
If using dividend yield of 6.25% as a benchmark, based on the dividend of SGD0.1084 there is potential for CICT to see its share price drop by another 12.0% to SGD1.73. This may occur should the interest rates and yield of safe assets increase.
| Yield | Share Price | Downside |
|---|---|---|
| Current | 1.97 | – |
| 6.25% | 1.73 | -12.0% |
| 7.25% | 1.50 | -24.1% |
Interest Rate Sensitivity
The Federal Reserve on 30 January 2025 have kept interest rates unchanged at a range of 4.25% to 4.50%. This is due to significant uncertainty in the U.S. economic landscape, with a healthy set of macroeconomic fundamentals that have changed little in recent months, but coming decisions from the Trump administration on immigration, tariffs, taxes and other areas that could prove disruptive.
Website: Fed leaves rates unchanged, sees no hurry to cut again
CICT have provided the interest rate sensitivity analysis as below. Should the interest rate change by another 1.0%, using FY2024 DPU of 10.88 cents as a base, DPU is expected to change by 2.2%.
| Change in Interest Rates | Change in DPU (cents) | Change as % of FY2024 DPU |
|---|---|---|
| 50 bps | 0.12 | 1.1% |
| 100 bps | 0.24 | 2.2% |
| 150 bps | 0.36 | 3.3% |
| 200 bps | 0.48 | 4.4% |
Tenant profile
CICT has a well-diversified tenant profile with the top 10 tenants contributing to 16.9% of their total gross rent with no single tenant accounting for more than 4.9% during the period, providing income diversity to the portfolio.
Heartland Living
The Singapore government intend for every town to have a shopping mall available and successful. Such that they are willing to have measures to help support heartland businesses financially. This means that as an investor of retail properties, you can be assured that there will almost always be tenants for your shopping malls, which translates to rental income. It may still be subjected to capital depreciation and appreciation when exposed to economic conditions, such as the current high interest rates. However as of now, your interests are in line with the government.
Website: The Bull Case For Investing In Singapore Retail Property
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Distribution Per Unit | +0.4% | Favorable |
| Occupancy | 96.7% | Favorable |
| Gearing Ratio | 38.5% | Neutral |
| Interest Coverage | 3.1x | Favorable |
| Debt Maturity Profile | 3.9 years | Favorable |
| Price to Book Ratio | 0.93 | Favorable |
| Overall | Favorable |
Overall, the metrics remain Favorable to invest in CICT. In the current environment where many REITs has seen downtrend in operations, CICT have been able to remain relatively stable this quarter. This should provide investors with a peace of mind.
Background
CICT is the first and largest real estate investment trust (“REIT”) listed on Singapore Exchange Securities Trading Limited (“SGX ST”). It made its debut on SGX ST as CapitaLand Mall Trust (“CMT”) in July 2002 and was renamed CICT in November 2020 following the merger with CapitaLand Commercial Trust (“CCT”).
CICT owns and invests in quality income producing assets primarily used for commercial (including retail and/or office) purpose, located predominantly in Singapore.
CICT is managed by CapitaLand Integrated Commercial Trust Management Limited, a wholly owned subsidiary of CapitaLand Investment Limited (“CLI”), a leading global real estate investment manager with a strong Asia foothold.
Previous Post
Website: CapitaLand Integrated Commercial Trust (SGX: C38U): 2024 Third Quarter Business Update
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