CapitaLand Integrated Commercial Trust posts 3Q21 net property income more than doubled

CapitaLand Integrated Commercial Trust's Raffles City mall in SingaporeCapitaLand Integrated Commercial Trust's Raffles City mall in Singapore

CapitaLand Integrated Commercial Trust reported Friday its third quarter net property income more than doubled on-year to S$242.6 million, from S$104.5 million on the full contribution from the Raffles City Singapore property and from a larger portfolio.

Gross revenue for the July-to-September quarter also jumped, rising to S$329.0 million, compared with S$150.3 million in the year-ago quarter, the trust said in a filing to SGX.

The portfolio had a committed occupancy of 94.4 percent as of end-September, CICT said.

Retail

For the retail assets, net property income for the quarter rose to S$97.7 million from S$74.3 million in the year-ago period, while gross revenue improved to S$136.6 million from S$109.9 million in the year-earlier quarter, the trust said.

Retail tenants’ average sales per square foot for the January-to-September period had recovered to 83.8 percent of the average in 2019, before the Covid-19 pandemic, and to 101 percent of 2020’s average, CICT said.

However, January-to-September shopper traffic was only at 59.8 percent of 2019’s level, but it had reached 100.9 percent of 2020’s, the filing said.

Retail rental reversions were lower, with incoming average rents 3.8 percent below outgoing average rents, and year one rents 8 percent below outgoing final rents, the filing said.

Retail occupancy was at 96.4 percent as of end-September, CICT said.

Integrated Developments

The integrated developments posted third quarter net property income more than doubled to S$70.2 million from S$30.2 million in the year-ago period on the inclusion of 100 percent of the Raffles City Singapore property; it was excluded from the year-ago figure as at the time it was a 40 percent-owned joint venture, the trust said.

Revenue for the integrated developments jumped to S$95.1 million from S$40.4 million in the year-ago period, the trust said.

Office assets

The office assets posted net property income of S$74.7 million and gross revenue of S$97.3 million, excluding the One George Street property, as it is a joint venture, the trust said; it noted office assets only began contributing from October 2020 onward so there is no year-ago figure.

The return of the office community average for the week ended 15 October was only 15.4 percent as work-from-home is the default work arrangement in Singapore, the trust said.

Occupancy of the office asses was at 92.6 percent as of end-September, the filing said.

Outlook

CICT issued an upbeat outlook.

For the office sector, the trust pointed to a continued on-quarter recovery in grade-A central business district (CBD) office rents, and to CBRE projections of further rental growth in the mid-term underpinned by tight vacancy and rapid demand expansion from the tech sector.

CICT noted suburban prime retail rents have continued to rise.

The retail segment is “poised to benefit from improvement in economic activity and consumer sentiment with the progressive easing of border restrictions in 2022 and higher vaccination rates, barring any unforeseen setbacks,” CICT said.