The transaction would add 1% to JP Morgan’s forecast DPU for CICT. This is a bullish assumption as JP Morgan’s FY2025-2027 DPU estimates are 1-3% above the Street, “primarily because we see CICT as a prime beneficiary of a lower cost of debt” the July 1 report says.
JP Morgan’s best S-REIT idea for July is CapitaLand Integrated Commercial Trust because of its Singapore-focus as Singapore accounts for 95% of CICT’s portfolio by asset value. “Singapore’s suburban retail, which anchors CICT’s portfolio, is expected to remain resilient due to its focus on necessity shopping and limited new supply,” JP Mogan says in a July 1 report.
For CICT’s office portfolio, the lack of upcoming CBD office supply should mitigate downside risks to office rents. JP Morgan suggests that CICT should sell Bukit Panjang Plaza and use the debt headroom to acquire the 55% interest in CapitaSpring that it doesn’t own, ahead of the potential anchor rental renewal in 2026. Such a move would enable CICT to acquire CapitaSpring without any capital raising.
