In its 3QFY2024 business updates, CapitaLand Integrated Commercial Trust C38U (CICT) announced a 2% y-o-y rise in revenue for the nine months to Sept 30 (9MFY2024) to $1,189.8 million.
Net property income (NPI) for the same period rose by 5.4% y-o-y to $872.1 million, driven by higher gross rental income from existing properties and lower operating expenses, despite the absence of income from Gallileo, which has been undergoing an asset enhancement initiative (AEI) since February.
Committed occupancy in 3Q2024 was 96.4% with weighted average lease expiry of 3.5 years. Total rental reversions for 9MFY2024 was a positive 9.2%. Tenant sales rose by 1.4% y-o-y while shopper traffic rose by 3.7% y-o-y for the same period. CICT announced total new and renewed leases of 677,200 sq ft year-to-date till Sept 30, with a tenant retention rate of 86.1%.
The office portfolio experienced positive reversions of 11.7% for 9MFY2024. Total new and renewed leases year-to-date till Sept 30 was at 778,900 sq ft with tenant retention rate of 84.9%. This is despite consultants like Cushman & Wakefield cautioning that Grade A office supply office supply could stymie rent growth in 2H2024, limiting it to 1% to 2%.
Aggregate leverage eased to 39.4% as at Sept 30 compared to 39.8% as at June 30, and the average cost of debt crept up to 3.6% compared to 3.5% as at June 30. Average debt term to maturity rose to 3.8 years as at Sept 30 compared to 3.5 years as at June 30. The lower leverage was likely due to a placement, which raised $350 million and completed on Sept 16.
As at Sept 30, borrowings on fixed rates remained unchanged q-o-q at 76%. Following the issuance of $200 million of green bonds at 3.3%, CICT's FY2024 debt is fully refinanced.
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At an Oct 29 EGM, CICT obtained unitholders’ approval to acquire a 50% interest in ION Orchard and completed the acquisition on Oct 30. Very little new supply is likely within the Orchard Road area in the next year and beyond.
Elsewhere, CICT achieved 100% committed occupancy for Phase 1 and 2 AEI at IMM Building, an outlet mall. The AEI at Gallileo continues and is scheduled to be completed in 2H2025. The anchor tenant will be the European Central Bank.
