On 25 April 2025, CapitaLand Integrated Commercial Trust (“CICT”) announced their first quarter business update for FY2025. CICT has managed to renew some of their existing borrowings, which has extended their debt maturity profile from the previous quarter. Do note that these borrowings seem to be renewed on floating interest rates, as the percentage of borrowings on fixed interest rate have decreased slightly. There are no other significant changes noted during this quarter. Investors can have a peace of mind while waiting for the next financial update.
In general, do note that there are some economic uncertainties that are currently occurring around the world. There is a need to monitor for all REITs if their tenants will be affected by changes in tariffs or interest rates over the next few quarters.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
Website: General Announcement::1Q2025 Business Updates
Photo source: https://fifthperson.com/cmt-cct-merger-pros-cons/
Financial Highlights
Distribution Per Unit (“DPU”)
| Metrics | Current | Previous |
|---|---|---|
| Distribution Per Unit | No Update | +0.4% |
| Rating | Favorable | Favorable |
Based on the announcement on 25 April 2025, DPU was not included in the business update for the first quarter of FY2025.
This metric was Favorable as of 31 December 2024 as DPU had increased by 0.4% for the second half of FY2024.
Occupancy
| Metrics | Current | Previous |
|---|---|---|
| Occupancy | 96.4% | 96.7% |
| Rating | Favorable | Favorable |
Occupancy rate as of 31 March 2025 has decreased slightly to 96.4%. The metric remains Favorable as it is above my expected healthy occupancy rate of 95%.
Gearing ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing Ratio | 38.7% | 38.5% |
| Rating | Neutral | Neutral |
Gearing ratio as of 31 March 2025 has increased slightly to 38.7%. The metric remains Neutral as it is still close to my threshold of 40.0%.
Interest coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest Coverage | 3.2x | 3.1x |
| Rating | Favorable | Favorable |
The interest coverage as of 31 March 2025 has improved slightly to 3.2 times. The metric remains Favorable as the interest coverage is above 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 | 4.2 years | 3.9 years |
| Rating | Favorable | Favorable |
Weighted average term to maturity of their debt as of 31 March 2025 has lengthened to 4.2 years. With total borrowings remain relatively unchanged from the previous quarter, the extension is likely due to renewal of existing borrowings. The metric remains Favorable and it allows them sufficient time to refinance their debts as they fall due. Do note that 14% of their debt due to mature over the next 2 financial years.
Price to Book Ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 1.01 | 0.93 |
| Rating | Favorable | Favorable |
Based on the announcement on 25 April 2025, net asset value (“NAV”) was not included in the business update for the first quarter of FY2025.
The Price to Book (“P/B”) ratio currently stands at 1.01. This is computed using the closing share price of SGD2.15 on 2 May 2025 and the net asset value per share of SGD2.12 as of 31 December 2024. The metric remains Favorable as investors will be paying a small premium to book value for a REIT with a strong sponsor.
As of 2 May 2025, the Market Capitalization is approximately SGD15,725 million.
Website: Yahoo Finance: CapitaLand Integrated Commercial Trust (C38U.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 1.53% | SGD 0.033 |
| 2024 | 6.07% | SGD 0.130 |
| 2023 | 4.96% | SGD 0.107 |
| 2022 | 2.60% | SGD 0.056 |
| 2021 | 5.47% | SGD 0.118 |
| 2020 | 2.84% | 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 first half of FY2025. For a better estimation this quarter, we will continue to 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 SGD2.15 on 2 May 2025, this translates to a dividend yield of 5.04%. For my benchmark, a general reasonable yield would be around 5.25%. CICT’s dividend yield is slightly below my benchmark and is Neutral.
Website: Reasonable Dividend Yield 2025Q2 – 5.25%
If using dividend yield of 5.25% as a benchmark, based on the dividend of SGD0.1084 there is potential for CICT to see its share price drop by another 4.0% to SGD2.06. This may occur should the interest rates and yield of safe assets increase.
| Yield | Share Price | Downside |
|---|---|---|
| Current | 2.15 | – |
| 5.25% | 2.06 | -4.0% |
| 6.25% | 1.73 | -19.3% |
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
The Federal Reserve on 16 April 2025 said on Wednesday that they would wait for more data on the economy’s direction before changing interest rates but cautioned that President Donald Trump’s tariff policies risked pushing inflation and employment further from the central bank’s goals.
Website: Powell says Fed remains in wait-and-see mode; markets processing policy shifts
CICT have provided the interest rate sensitivity analysis as below. Should the interest rate change by 1.0%, using FY2024 DPU of 10.88 cents as a base, DPU is expected to change by 2.6%.
| Change in Interest Rates | Change in DPU (cents) | Change as % of FY2024 DPU |
|---|---|---|
| 50 bps | 0.14 | 1.3% |
| 100 bps | 0.28 | 2.6% |
| 150 bps | 0.42 | 3.9% |
| 200 bps | 0.56 | 5.1% |
Tenant profile
CICT has a well-diversified tenant profile with the top 10 tenants contributing to 16.8% of their total gross rent with no single tenant accounting for more than 4.8% 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 | No Update | Favorable |
| Occupancy | 96.4% | Favorable |
| Gearing Ratio | 38.7% | Neutral |
| Interest Coverage | 3.2x | Favorable |
| Debt Maturity Profile | 4.2 years | Favorable |
| Price to Book Ratio | 1.01 | Favorable |
| Overall | Favorable |
Overall, the metrics remain Favorable to invest in CICT. There are no significant updates in this business update. Investors can wait for the next announcement which will cover the financial result for the first half of FY2025.
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.
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Website: CapitaLand Integrated Commercial Trust (SGX: C38U): 2024 Full Year Result
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