CICT reports 6.3% y-o-y gain in net property income for 1QFY2024

CICT managed to achieve rental reversion of 7.2% for its retail properties ytd, and 14.1% for its office portfolio

CapitaLand Integrated Commercial Trust has reported a net property income of $293.7 million for 1QFY2024, up 6.3% y-o-y, thanks to rental income growth, combined with lower operating costs.

Committed occupancy was down by 0.3 percentage points Q-o-Q to 97%. Gross revenue, meanwhile, was up 2.6% y-o-y to $398.6 million, reported CICT in its business update.

Year to date, CICT's rental reversion for its retail portfolio was up 7.2% while its office portfolio fetched an increase of 14.1%.

According to CICT, 1QFY2024 tenant sales per square foot rose 2.1% y-o-y, while shopper traffic continued to recover, up 3.6% y-o-y, led by downtown malls.

It signed total new and renewed leases for 254,600 sq ft with tenant retention rate of 88.1%.

CICT's office portfolio, meanwhile, signed total new and renewed leases of 209,900 sq ft with tenant retention rate of 84.2%.

CICT has launched asset enhancement initiatives for the IMM Building. It has thus far achieved committed occupancy of 75% for Phase 1 and 2 of the AEI, including leases under advanced negotiations.

Earlier, CICT had signed the European Central Bank as its anchor tenant at Gallileo, Frankfurt. 

As at end of 1QFY204, 76% of CICT's total borrowings' on fixed interest rate. It has held its aggregate leverage at 40.0% with the average cost of debt at 3.5%.

DBS Group Research calls the 1QFY2024 numbers a "good start" for the REIT.  "We expect Singapore assets will likely remain stable with upside from retail and office riding on the strong positive reversions over the past year," says DBS.

However, DBS warns that overall growth could moderate with the AEI plans at Gallileo.

"We continue to look forward to any potential asset recycling by CICT which could bode well for investors to pare down gearing levels, in our view," says DBS, which has kept its "buy" call and $2.30 target price. 

"With more than 90% of its portfolio comprising Singapore assets, we believe CICT is a close proxy if Singapore's economy remains to be more resilient compared to other developed markets," adds DBS.