CICT: Where the REIT is Seeking Acquisitions

apitaLand Integrated Commercial Trust (CICT) entered a deal in December 2021 to acquire 50 percent of Greenwood Plaza in Sydney, Australia. Credit: CapitaLandCapitaLand Integrated Commercial Trust (CICT) entered a deal in December 2021 to acquire 50 percent of Greenwood Plaza in Sydney, Australia. Credit: CapitaLand

CapitaLand Integrated Commercial Trust (CICT) highlighted Monday that it is proactively seeking acquisitions in Singapore and other developed markets. 

“Outside Singapore, CICT currently has presence in Germany and Australia and these markets will be our immediate focus. With established presence, we are in better position to access to more opportunities for our assessments,” CICT said in a filing to SGX with answers to shareholders’ questions before its annual general meeting (AGM). 

CICT said it is open to acquire both from CapitaLand group and from third parties. 

The REIT reiterated its long-term plan is to remain Singapore-focused, with no more than 20 percent of the portfolio property value in overseas developed markets; once all the announced acquisitions are completed, the REIT will have 92 percent of portfolio property value in Singapore, 4 percent in Frankfurt, Germany, and 4 percent in Sydney, Australia, the filing said. 

Overseas assets

When asked about the motivation for investing in Germany and Australia, CICT said it plans to explore redevelopment and/or upgrading for some of its Singapore properties. 

“We wanted some income diversification from other markets which could mitigate some risks and downtime from Singapore, especially if we start to execute plan which may take some time to be completed and income contribution could be later,” CICT said. 

The REIT said Sydney and Frankfurt are “natural markets” for investment as developed markets with healthy demand and stable returns, and CapitaLand group has networks located there.

Merger with another REIT?

When asked if CICT would be merged with another CapitaLand REIT, such as CapitaLand China Trust (CLCT), the REIT said indicated that wasn’t on the cards. 

“CICT has clearly articulated its growth strategy will be in Singapore and overseas developed markets (no more than 20 percent of portfolio property value) and in asset types comprising retail, integrated development and office. Any mergers and acquisitions which are not aligned to its strategy will not be considered,” the REIT said.

Clarke Quay

When asked about the plans for the Clarke Quay asset, CICT noted the positioning has been toward nightlife and entertainment, which was impacted by Covid-related restrictions for most of 2020 and 2021. 

“Although the restrictions have been largely lifted, our longer-term asset plan considers a balanced mix of day and night trading given the changing landscape of the area, as more residential developments are completing over the next few years,” CICT said. “To change the positioning of the place, it requires repositioning of the tenant mix and likely some upgrading work to take place. The planning is still work-in-progress.” 

Occupancy at Clarke Quay was at 73.5 percent as of end-December, on the Covid-related restrictions on trading hours and alcohol sales, as well as plans to reposition the tenant mix, CICT said.

The REIT’s portfolio has 24 properties, with 20 in Singapore, and one more asset there pending acquisition completion, two in Germany and two in Australia, with a third asset there pending completion, as of 24 March, the filing said.

 

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