Interestingly, both REITs had equity fundraisings in 2H2024 of $1.1 billion each to acquire Singapore assets. CICT acquired the glamorous ION Orchard and KDC REIT acquired KDC SGP 7 and 8, which are less glamorous but a lot more accretive. The placement units of CICT and KDC REIT were oversubscribed, as were the preferential offers from both REITs.
During a results briefing on Feb 5, Tony Tan, CEO of the manager of CapitaLand Integrated Commercial Trust (SGX:C38U
) (CICT), confirmed what many investors had been hoping to hear, that Singapore remains the main focus of his REIT. When asked where CICT is likely to invest geographically, Tan replied: “Our preference is Singapore to continue to increase our lead. We are leading the pack and we must make sure we run faster. The highest priority is here [Singapore].”
For FY2024, as of Feb 5, of the eight REITs that have announced either year-end or first-half results, two were able to report increases in interest coverage ratios (ICR) and declines in aggregate leverage. CICT’s ICR rose from 3x to 3.1x, while Keppel DC REIT’s ICR rose from 5.1x to 5.3x.
