5 Things You Should Know About CapitaLand Integrated Commercial Trust (SGX: C38U) Before Investing
Sudhan P●
CapitaLand Integrated Commercial Trust (SGX: C38U) (CICT) is one of the biggest real estate investment trusts (REITs) in the Asia Pacific region and the largest REIT in Singapore by market capitalisation and total portfolio property value.
CICT was formed after the successful merger between CapitaLand Commercial Trust (CCT) and CapitaLand Mall Trust (CMT) recently.
With that, let’s look at five important things investors should know about CICT right now.
#1: Properties Under CapitaLand Integrated Commercial Trust
CICT’s portfolio comprises of 24 properties in the retail, office, and integrated developments space.
Singapore accounts for 96% of its portfolio property value, with the remaining 4% in Germany.
Here’s a look at the different properties CICT owns in Singapore:
Over in Germany, CICT owns two properties — Gallileo and Main Airport Center — that are located in Frankfurt’s city centre and its airport office district, respectively.
By asset type, CICT’s office properties took up the bulk of the 2021 first-half net property income (NPI) at 31.1%, while retail contributed to 40.0%, and integrated developments were at 28.9%.
In terms of contribution by properties, Raffles City Singapore was the largest contributor at 14.8%, followed by Plaza Singapura and The Atrium@Orchard (9.7%), and Asia Square Tower 2 (8.3%).
The top five properties contributed to 47.3% of CICT’s 2021 first-half NPI.
| Property | Percentage property contributed to 1H2021 NPI |
|---|---|
| Raffles City Singapore | 14.8% |
| Plaza Singapura and The Atrium@Orchard | 9.7% |
| Asia Square Tower 2 | 8.3% |
| CapitaGreen | 8.0% |
| IMM | 6.5% |
| Other properties | 52.7% |
Source: CapitaLand Integrated Commercial Trust
#2: Top 10 Tenants
Now, let’s look at CICT’s top tenants to check if the REIT has tenant concentration risk.
As seen from the table below, CICT’s tenant profile is well-diversified as no single tenant contributed to more than 5% of its total gross rental income, as of June 2021.
| Tenant | Percentage of total gross rent | Trade sector |
|---|---|---|
| RC Hotels (Pte) Ltd | 4.8% | Hotel |
| WeWork Singapore Pte Ltd | 2.8% | Real Estate and Property Services |
| NTUC Enterprise Co-operative Limited | 2.2% | Supermarket / Beauty & Health / Services / Food & Beverage / Education / Warehouse |
| Temasek Holdings (Private) Limited | 2.0% | Financial Services |
| Commerzbank AG | 1.9% | Banking |
| GIC Private Limited | 1.6% | Financial Services |
| Cold Storage Singapore (1983) Pte Ltd | 1.6% | Supermarket / Beauty & Health / Services / Warehouse |
| Mizuho Bank, Ltd | 1.6% | Banking |
| BreadTalk Group Limited | 1.5% | Food & Beverage |
| JPMorgan Chase Bank, N.A. | 1.2% | Banking |
| Total | 21.2% | |
Source: CapitaLand Integrated Commercial Trust
#3: Occupancy Rate
As of 30 June 2021, CICT’s occupancy rate was still at a healthy 94.9%, despite headwinds from the pandemic.
CICT’s retail and office occupancies were at 97.0% and 93.0%, respectively.
#4: Gearing Ratio
CICT had a gearing ratio of 40.5%, as of end-June 2021.
The ratio is well within the previous regulatory limit of 45% and the revised ratio of 50%.
#5: COVID-19 Update
CICT’s retail malls, which were under CMT previously, have seen volatile tenant sales and shopper traffic numbers over the past few quarters, given the surge in COVID-19 cases and government restrictions put in place.
As for the office properties in Singapore, around 37% of CICT’s office community has returned to work (for the week ended 3 September 2021).
CICT last traded at a unit price of S$2.11 on 23 September.
At that price, it’s selling at a price-to-book ratio of around 1.0x and a distribution yield of 4.9% (obtained by annualising the 2021 first-half distribution per unit (DPU) of 5.18 cents).
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Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. Readers should always do their own due diligence and consider their financial goals before investing in any stock. The writer doesn’t own shares in any companies mentioned.
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