Capitaland Integrated Commercial Trust 2H 2021 Results

 

Capitaland Integrated Commercial Trust (CICT) [SGX.C38U] announced its 2H 2021 results today.

Dividend per unit (DPU) for 2H 2021 declines by 8.9% to 5.22 cents as compared to 5.73 cents in 2H 2020.

As advanced payment of 4.85 cents for the period 1 Jul 2021 to 15 Dec 2021 has been paid on 28 Jan (coincidentally today) due to private placement, only DPU of 0.37 cents will be paid on 15 Mar 2022.

Even though gross revenue, net property income and distributable income for 2H 2021 increases significantly compared to 2H 2020, DPU declines due to the dilutive private placement causing a larger number of outstanding shares (127.6m).

After the merger with Capitaland Commercial Trust on 21 Oct 2020, CICT has wholly owned Raffles City Singapore, contributing to the increased distribution income.

Portfolio occupancy was at 93.9%, with retail properties at 96.8% and office properties at 91% and integrated developments at 96%. Capita Spring achieved TOP in Nov 2021 and has only partially begun to contribute to the distribution income. Likewise, for recently acquired Australian properties such as 101 Miller Street and Greenwood Plaza in Sydney, 66 Goulburn Street and 100 Arthur Street, local properties undergoing AEI such as Six Battery Road and 21 Collyer Quay, they are expected to contribute strongly to distribution income this year.

Retention rate of tenants was 82.3% and it is disappointing to see negative rental reversion of - 7.3% for Year 1 rents vs outgoing final rents and - 3.2% for incoming average rents vs outgoing average rents. For downtown malls, the negative rental reversion is - 13.8% compared to for suburban malls' - 2.4%. This is a harsh reflection of the reality caused by WFH impact from the pandemic though.

However, it is encouraging to see tenant sales psf recovered to 87.8% of 2019 pre-pandemic times and shopper traffic recovered to 61.2% of 2019 pre-pandemic times.

CICT's aggregate leverage was 37.2% and average cost of debt was stable at 2.3% per annum. Interest coverage ratio was at 4.1 times.

At share price of $1.94 as of time of writing, an annual dividend of 10.4 cents would give CICT a yield of 5.36% per annum, which is fairly attractive. However, with the immense noises, fears and uncertainties, it is possible that CICT will see further weakness in its share price. 

I still believe that it is a no-brainer to not own this pioneer and largest Reit listed on SGX that owns the best shopping malls and top grade office buildings in Singapore. In the past 2 decades, we have seen this Reit beaten down and thrashed to pulp and then rise, awaken and reborn as always. This time will be no different.

Thanks for reading. Stay safe and be strong as always. 

With love & peace, 

Qiongster