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CICT reports 2HFY2021 DPU of 5.22 cents on enlarged base; FY2021 DPU of 10.40 cents

·4-min read

Tony Tan, CEO of the manager says the REIT remains “cautiously optimistic” in its outlook for 2022 for three reasons. Here's why.

The manager of CapitaLand Integrated Commercial Trust (CICT) has reported a distribution per unit (DPU) of 5.22 cents for the 2HFY2021 ended December, 8.9% lower y-o-y. This brings the DPU for the FY2021 to 10.40 cents, 19.7% higher y-o-y.

Distributable income for the 2HFY2021, however, grew 30.5% y-o-y to $338.8 million, largely driven by contribution from the assets under the former CapitaLand Commercial Trust (CCT) and 100% contribution from Raffles City after the merger with CCT in 2HFY2020.

The lower DPU for the period is likely due to the enlarged base from the 127.6 million new units issued under the REIT’s private placement to raise some $250.0 million of equity proceeds in December 2021.

An advanced distribution of $314.3 million for the period from July 1, 2021 to Dec 15, 2021, will be paid on Jan 28. The remaining distribution of $24.5 million from Dec 16 to Dec 31, 2021, will be paid on March 15.

2HFY2021 gross revenue climbed by 54.5% y-o-y to $659.4 million mainly due to contribution from the enlarged portfolio following the merger in October 2020. The lower rental waiver granted to tenants in the 2HFY2021 contributed to the higher amount as well.

2HFY2021 property operating expenses increased by 38.4% y-o-y to $180.5 million mainly due to the merger in October 2020.

Accordingly, net property income (NPI) for the 2HFY2021 stood 61.6% y-o-y up at $478.9 million.

During the half-year period, finance costs stood 10.7% higher y-o-y at $8.2 million mainly from borrowings drawn down to fund the merger.

Share of results of joint venture in the 2HFY2021 grew $119.6 million to $133.5 million mainly due to the gain on disposal on One George Street and fair value gain on investment properties of CapitaSpring.

FY2021 gross revenue surged by 75.1% y-o-y to $1.31 billion mainly due to the contributions from the enlarged portfolio.

FY2021 property operating expenses increased 52.3% y-o-y to $354.0 million for the same reasons.

As a result, NPI for the FY2021 increased by 85.5% y-o-y to $951.1 million.

Finance costs for the FY2021 stood 42.2% y-o-y higher due to borrowings drawn down from the merger.

Share of results of joint venture stood $154.3 million higher at $140.2 million.

As at end-December, CICT reported a portfolio occupancy of 93.9% with a weighted average lease expiry (WALE) of 3.2 years.

During the year, the REIT signed around 1.9 million sq ft of new leases and renewals.

CICT’s aggregate leverage stood at 37.2% as at end-December.

Cash and cash equivalents as at end-December stood at $365.1 million.

“CICT is pleased to deliver a DPU of 10.40 cents in FY2021 against the backdrop of an ever-evolving pandemic and a challenging business environment. We continue to support our tenants in times of uncertainty by managing their space requirements with agility,” says Teo Swee Lian, chairman of the manager.

“For retail tenants affected by Covid-19, we have provided them with relevant omnichannel marketing support and granted them rental waivers. Doing so has built greater resilience into CICT’s portfolio, and positioned it well to benefit from the market upturn,” she adds.

In Australia, Teo says the REIT’s inroads into the country’s central business district (CBD) office market will enable it to “capitalise on the country’s reopening theme and add another stable income stream in the near future”.

Singapore will remain CICT’s home base and key market, she continues.

Tony Tan, CEO of the manager says the REIT remains “cautiously optimistic” in its outlook for 2022.

“Firstly, CICT’s portfolio valuation as at end-2021 was up 3.5% year-on-year, signifying an improving outlook for Singapore’s retail and office market. Secondly, CICT’s portfolio operating metrics have remained resilient after weathering through the challenges of 2021. Importantly, properties such as 21 Collyer Quay and Six Battery Road that have undergone upgrading works in the last two years, the newly completed development project CapitaSpring as well as the completion of the three Sydney assets, are expected to meaningfully contribute income from 2HFY2022,” he says.

“2HFY2021 saw the active and disciplined execution of CICT’s portfolio reconstitution strategy, whereby capital unlocked from the sale of non-core assets was recycled into higher-yielding investment opportunities that enhance CICT’s foundation for growth. This journey continues into 2022 as we unlock the value of JCube through an asset sale forS$340.0 million. Going forward, we will continue to stay nimble and flexible as we strive to further strengthen CICT’s portfolio and ride the economic recovery of Singapore, Australia and Germany,” he adds.

Units in CICT closed 2 cents lower or 1.01% down at $1.96 on Jan 27.

Photo: CapitaLand

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