Analysts at RHB Bank Singapore and CGS International (CGSI) are keeping their “buy” and “add” calls on CapitaLand Integrated Commercial Trust C38U (CICT) with higher target prices of $2.30 and $2.21 respectively after the trust posted “solid” 1HFY2024 ended June results.
RHB’s Vijay Natarajan highlights CICT’s stronger-than-expected double digit office rent reversion, which reinforces his positive stance against a slightly bearish consensus view. While retail operational metrics continue to show steady improvements, the focus will be on slowing tenant sales growth, he adds.
For FY2024, CICT’s manager maintained its rental reversion guidance of high single-digits, given the higher incoming completed supply in 2025, CGSI analysts Lock Mun Yee and Natalie Ong note.
“Meanwhile, the planned asset enhancement initiative (AEI) for Galileo has commenced, with handover of the refurbished space expected from 2HFY2025. Management updated that the precommitment level for the property had increased to 96.7%,” they further point out.
Acquisitions are also back on the card — Natarajan says a potential acquisition could be the call option exercise for the remaining 55% stake in the iconic CapitaSpring, the funding for which could come from divestment of some of CICT’s mature or non-core assets, such as Bukit Panjang Plaza, 21 Collyer Quay and Citadines Raffles Place.
RHB has tweaked its FY2026-FY2027 DPU estimates by 2%-3% by lowering interest costs and slightly adjusting down its cost equity assumption by 20 basis points.
See also: UOBKH calls Centurion Corp a stock for ‘growth-minded investors’
CGSI analysts, on the other hand, have kept its DPU estimates unchanged. However, the analysts have raised their TP to $2.21 as they lift the pre-commitment assumptions for Galileo post-FY2026.
As at 3.40pm, units in CICT are trading at an unchanged $2.10.
