CICT posts 1H2021 distributable income of $335.9 mil; DPU of 5.18 cents

The higher distributable income was largely driven by contribution from CapitaLand Commercial Trust (CCT) assets and 100% contribution from Raffles City Singapore after the merger with CCT.

Gross revenue came in at $645.7 million, more than double 1HFY2020’s $318.4 million, due to the enlarged portfolio.

See also: CICT's 1Q21 performance in line with expectations, shows signs of recovery: analysts

To that end, net property income grew 118% y-o-y to $472.2 million. The growth in NPI was slightly dampened by Covid-19 rental waivers given to tenants during the period totalling $18.9 million.

“The operational challenges arising from the evolving pandemic situation have affected our business as well as our tenants. We have provided more regular cleaning and adopted safe management measures to ensure the safety of our shoppers and tenants. Targeted support was also given to more affected tenants due to restrictions in trading and during Phase 2 (Heightened Alert)," says Tony Tan, CEO of CICT's manager.

Given the higher NPI, the amount available for distribution came in at $338.1 million, up 110% y-o-y from $160.9 million previously. $2.2 million was retained for general corporate and working capital purposes.

In terms of its portfolio, CICT has an occupancy rate of 94.9% as at June 30, with a weighted average lease expiry of 3.1 years, measured by monthly gross rental income.

Split by segments, occupancies for its retail, office and integrated development assets stood at 97%, 93% and 96.5% respectively.

According to the manager, CICT signed approximately 1 million square feet (sq ft) of new leases and renewals in 1H2021, comprising 0.54 million sq ft of retail space and 0.48 million sq ft of office space. The majority of leases signed are renewals.

CICT has a remaining 7.2% in retail leases and 3.9% in office leases by portfolio gross rental income due in 2021.

For the retail portfolio, tenants’ sales and shopper traffic during the 1HFY2021 recovered to 86.3% and 61.3% of pre-Covid-19 levels based on FY2019 monthly average. Rental reversion was still negative, though at a smaller rate compared to the 2HFY2020.

For its office portfolio, its Singapore offices had an occupancy rate of 92.4%, while its Germany offices had an occupancy rate of 95.5%. According to the manager, rents committed for its Singapore offices remain above market levels.

The manager highlights that CICT’s asset enhancement initiatives for 21 Collyer Quay are largely completed, with WeWork’s lease for 21 Collyer Quay to commence in late 2021.

For its CapitaSpring development, committed occupancy stands at 61.8% as at July 22 with another 15% under advance negotiation. Its target completion remains on track for the 4Q2021.

CICT’s aggregate leverage was 40.5% and the average cost of debt was maintained at 2.4% as at June 30, while the average term to maturity was 4.3 years. The proportion of fixed-rate borrowings stood at 85%.

For more stories about where the money flows, click here for our Capital section

Looking ahead, the manager says CICT is poised to benefit from improvement in economic activity and consumer/business sentiment on the back of the vaccination rollout.

"In view of persisting market uncertainty, we will continue to be agile and flexible in managing our portfolio. Deepening stakeholder engagement and providing tenants with the appropriate targeted support to enhance the resilience of CICT’s ecosystem remains an ongoing focus. In CICT’s core markets of Singapore and Frankfurt, retail, office and integrated development assets remain in demand. To future-enable our properties, we are leveraging technology and taking proactive steps to adapt and reposition. This will ensure our properties stay relevant," says Tan.

Units in CICT closed up 1 cent or 0.48% higher at $2.10.

Photo: CICT