The manager of CapitaLand Integrated Commercial Trust (CICT) has reported distribution per unit (DPU) of 8.69 cents for the FY2020 ended December on Jan 21, compared to 11.97 cents in FY2019.
For the 4QFY2020, DPU stood at 2.63 cents, 15.4% y-o-y lower than that of 4QFY2019, due to the new units issued as part of the merger. The DPU includes the clean-up DPU of 0.89 cents for the period from Oct 1 to 20, 2020, which was paid to CapitaLand Mall Trust’s (CMT) unitholders on Nov 19, 2020.
For the 4QFY2020, unitholders will be receiving DPU of 1.74 cents for the period between Oct 21, 2020, to Dec 31, 2020.
In comparison, unitholder received DPU of 3.11 cents for the 4QFY2019 which comprised distribution for the period from Oct 1, 2019, to Dec 31, 2019.
Distributable income for the 4QFY2020 grew 26.8% y-o-y to $145.4 million. The increase was mainly due the contribution from the assets of CapitaLand Commercial Trust (CCT).
CMT and CCT, on Jan 22, 2020, announced that they will be merging into a diversified commercial real estate investment trust (REIT) to be named CICT, with a market capitalisation of $16.8 billion.
4QFY2020 gross revenue rose 36.0% y-o-y to $276.5 million, mainly due to the completion of the merger on Oct 21, 2020.
In addition, RCS Trust, which was equity accounted by CICT before the merger, is now a wholly-owned subsidiary.
Excluding the effect of the merger, 4QFY2020 gross revenue stood $28.3 million lower compared to 4QFY2019 due to lower gross rental income as rental waivers were granted by the trust to tenants.
Lower occupancy and rental rates contracted on new and renewed leases while gross turnover and other income were lower compared to the same period in 2019.
Property operating expenses grew 35.1% y-o-y to $84.6 million for the 4QFY2020, while figures stood $5.8 million lower excluding the effect of the merger. The decrease is mainly due to lower property tax, property management fees as a result of lower gross revenue and net property income (NPI), property management reimbursables, as well as lower marketing, utilities and maintenance expenses.
NPI for the 4QFY2020 rose 36.4% y-o-y to $191.9 million.
Management fees for 4QFY2020 were 60.5% y-o-y higher at $48.1 million, which includes the interest expense and amortisation of transaction costs in relation to the borrowings drawn down to fund the merger.
Excluding the effect of the merger, finance cost for the quarter was slightly lower mainly due to the repayment of IMT’s bank borrowings and euro medium-term notes (EMTN) of 10 billion yen ($127.9 million) in 4QFY2019.
The REIT reported portfolio occupancy rate of 96.4% for the 4QFY2020. Its weighted average expiry stood at three years for its portfolio as at Dec 31, 2020, by monthly gross rental income.
Adjusted net asset value (NAV) per unit after excluding 4QFY2020 DPU stood flat at $2 compared to pro forma NAV of $2.02 six months ago.
Cash and cash equivalents as at Dec 31, 2020, stood at $183.6 million.
“Singapore’s commercial real estate sector was significantly impacted by Covid-19 in 2020… As the leader in Singapore’s commercial real estate, we overcame the challenges with our tenants by providing substantial rental relief and helping our retailers to transform their business models and adopt omnichannel strategies,” says Teo Swee Lian, chairman of the manager.
“The bonds that were forged with our stakeholders during this period will put CICT’s ecosystem in good stead to ride Singapore’s economic recovery in 2021. CICT’s enlarged and more balanced portfolio post-merger will further strengthen our competitive advantage as the team seeks out new opportunities for growth,” Teo adds.
“In 4QFY2020, CICT continued to register improvements in its operating metrics. Shopper traffic and tenants’ sales per square foot in 4QFY2020 recovered to about 67.9% and 94.5% of 4Q 2019 levels. For the week ended Jan 15, about 43% of CICT’s office community have returned, says Tony Tan, CEO of the manager.
““Notwithstanding a healthy committed portfolio occupancy of 96.4%, we remain proactive in working with our tenants to address their space and leasing requirements with flexibility and optionality. We aim to maintain stability of the portfolio by balancing our lease expiry profile with both longer and shorter-term leases, and through retaining existing tenants and attracting new tenants,” he adds.
The record date for the DPU is Jan 29, and unitholders can expect to receive their distribution on March 9.
This will be CICT’s last quarterly distribution. The REIT will be paying distribution on a half-year basis from FY2021.
Units in CICT closed 1 cent higher or 0.4% up at $2.35 on Jan 20.
