5 things you should know about Capitaland Integrated Commercial Trust before investing

CapitaLand Integrated Commercial Trust (CICT) is one of the biggest real estate investment trusts (REITs) in the Asia Pacific region and the largest REIT in Singapore by market capitalisation and total portfolio property value.

CICT was formed after the successful merger between CapitaLand Commercial Trust (CCT) and CapitaLand Mall Trust (CMT) recently.

With that, let’s look at five important things investors should know about CICT right now.

1. Properties Under CapitaLand Integrated Commercial Trust

CICT’s portfolio comprises of 24 properties in the retail, office, and integrated developments space.

Singapore accounts for 96 per cent of its portfolio property value, with the remaining 4per cent in Germany.

Here’s a look at the different properties CICT owns in Singapore:

Over in Germany, CICT owns two properties — Gallileo and Main Airport Centre — that are located in  Frankfurt’s city centre and its airport office district, respectively.

By asset type, CICT’s office properties took up the bulk of the 2021 first-half net property income (NPI) at 31.1 per cent, while retail contributed to 40.0 per cent, and integrated developments were at 28.9 per cent.

In terms of contribution by properties, Raffles City Singapore was the largest contributor at 14.8per cent, followed by Plaza Singapura and The Atrium@Orchard (9.7 per cent), and Asia Square Tower 2 (8.3per cent).

The top five properties contributed to 47.3per cent of CICT’s 2021 first-half NPI.

Source: CapitaLand Integrated Commercial Trust

2. Top 10 tenants

Now, let’s look at CICT’s top tenants to check if the REIT has tenant concentration risk.

As seen from the table below, CICT’s tenant profile is well-diversified as no single tenant contributed to more than 5per cent of its total gross rental income, as of June 2021.

Tenant	Percentage of total gross rent	Trade sector
RC Hotels (Pte) Ltd	4.8 per cent	Hotel
WeWork Singapore Pte Ltd	2.8 per cent	Real Estate and Property Services
NTUC Enterprise Co-operative Limited	2.2 per cent	Supermarket / Beauty & Health / Services / Food & Beverage / Education / Warehouse
Temasek Holdings (Private) Limited	2.0 per cent	Financial Services
Commerzbank AG	1.9 per cent	Banking
GIC Private Limited	1.6 per cent	Financial Services
Cold Storage Singapore (1983) Pte Ltd	1.6 per cent	Supermarket / Beauty & Health / Services / Warehouse
Mizuho Bank, Ltd	1.6 per cent	Banking
BreadTalk Group Limited	1.5 per cent	Food & Beverage
JPMorgan Chase Bank, N.A.	1.2 per cent	Banking
Total	21.2 per cent

Source: CapitaLand Integrated Commercial Trust

3. Occupancy rate

As of June 30, 2021, CICT’s occupancy rate was still at a healthy 94.9 per cent, despite headwinds from the pandemic.

CICT’s retail and office occupancies were at 97.0 per cent and 93.0 per cent, respectively.

4. Gearing ratio

CICT had a gearing ratio of 40.5 per cent, as of end-June 2021.

The ratio is well within the previous regulatory limit of 45 per cent and the revised ratio of 50 per cent.

5. Covid-19 update

CICT’s retail malls, which were under CMT previously, have seen volatile tenant sales and shopper traffic numbers over the past few quarters, given the surge in Covid-19 cases and government restrictions put in place.

As for the office properties in Singapore, around 37 per cent of CICT’s office community has returned to work (for the week ended Sept 3, 2021).

CICT last traded at a unit price of $2.11 on Sept 23.

At that price, it’s selling at a price-to-book ratio of around 1.0x and a distribution yield of 4.9 per cent (obtained by annualising the 2021 first-half distribution per unit (DPU) of 5.18 cents).

This article was first published in Seedly.