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CICT&rsquo s H2 DPU up 2.7% to S$0.0536 market watchers mostly optimistic despite earnings miss
CAPITALAND Integrated Commercial Trust&rsquo s : C38U -1.4% (CICT) distribution per unit (DPU) for the half year ended December 2022 rose 2.7 per cent year on year to S$0.0536, compared with S$0.0522 from FY2021.
The real estate investment trust&rsquo s (Reit) H2 FY2022 DPU was slightly lower than consensus estimates, as higher financing expenses offset gains from higher rental income and contributions from acquisitions.
&ldquo I know (DPU) is below market consensus, but I think we&rsquo ve done a little bit of things and hopefully going forward we&rsquo ll see some improvement from there,&rdquo said Tony Tan, chief executive of the Reit manager, at a briefing accompanying the results announcement on Wednesday (Feb 1).
&ldquo Bear in mind that we also have certain potential measures that will help improve the operating numbers going into 2023,&rdquo he added.
The way Citi analyst Brandon Lee sees it, CICT&rsquo s H2 results painted a positive picture on the ongoing recovery in Singapore&rsquo s retail sector.
Lee noted that CICT&rsquo s retail segment posted a fourth straight quarter of positive rent reversion amid improved occupancy rates. Tenants&rsquo sales also remained above pre-Covid levels.
While the office segment appears to be slowing down in terms of rent reversions and leasing demand, Lee forecasts that rent reversions for CICT&rsquo s office portfolio will remain positive in FY2023 amid competitive rents.
&ldquo Despite the slight earnings miss today, we maintain our &lsquo buy&rsquo rating in view of decent DPU growth &ndash driven by increased income from CapitaSpring and 2 asset enhancement initiatives (AEIs) in Singapore &ndash (as well as) continued recovery in the Singapore retail sector and potential redevelopment opportunities,&rdquo Lee said in a flash note.
For H2 FY2022, CICT posted a 14.4 per cent year-on-year increase in gross revenue to S$754.1 million, compared with S$659.4 million the previous year.
Net property income (NPI) for the second half rose 13.1 per cent year on year to S$541.7 million.
The topline increase was mainly driven by contributions from the trust&rsquo s recently acquired interests in CapitaSky in Singapore as well as assets in Australia, along with higher rental income from most of the Singapore assets.
This was however partially offset by higher operating expenses and the divestment of JCube, which was completed in March 2022.
CICT&rsquo s distributable income for H2 rose 4.8 per cent year on year to S$355.1 million from S$338.8 million the previous year. The record date for H2 DPU is Feb 9 and unitholders can expect to receive the payout on Mar 17.
For FY2022 ended Dec 31, DPU rose 1.7 per cent to S$0.1058 from S$0.104 in FY2021.
Gross revenue for the full year increased by 10.5 per cent year on year to S$1.44 billion compared with S$1.31 billion previously. NPI rose by 9.7 per cent year on year to S$1.04 billion from S$951.1 million in FY2021.
Tan noted that CICT&rsquo s NPI crossed the S$1 billion mark for the first time, calling it a &ldquo major milestone&rdquo for the Reit.
Based on CICT&rsquo s proportionate interests in its investment properties and joint ventures as at Dec 31, the trust&rsquo s aggregate portfolio property value increased by 8.9 per cent year on year to S$24.2 billion.
Committed portfolio occupancy for retail and office properties as well as integrated developments was 98.3 per cent, 94.4 per cent and 97.1 per cent respectively as at Dec 31, bringing the total committed portfolio occupancy to 95.8 per cent.
In FY2022, the trust signed approximately 2.5 million square feet (sq ft) of new leases and renewals, comprising around 1 million sq ft of retail space and 1.5 million sq ft of office space. The tenant retention rate for its retail properties and office properties in Singapore was 89.1 per cent and 80.9 per cent, respectively.
CICT&rsquo s manager expects Singapore&rsquo s commercial portfolio to benefit from continued consumption recovery, mainly due to an anticipated increase in tourist arrivals and a repositioned retail tenant trade mix.
Tan said the Reit manager will focus on riding the tailwinds of post-pandemic recovery to improve its operating metrics while navigating macroeconomic uncertainties to manage costs.
&ldquo There are some dark clouds out there. Everyone knows about it there&rsquo s no surprise,&rdquo Tan said. &ldquo We have not seen a very widespread impact in Singapore yet, but because the environment is in the mood of rationalisation&hellip in line with what some consultants are saying, we&rsquo ll probably see a little bit of slowdown in terms of rental growth going into 2023.&rdquo
&ldquo Nevertheless, there are other positive factors underpinning Singapore&rsquo s office market,&rdquo he added.
At the same time, Tan said the Reit is on track to complete its ongoing AEI at CQ @ Clarke Quay by this year. &ldquo We are already planning ahead&hellip (and) there are a couple of projects we are studying,&rdquo he said.
At CICT&rsquo s closing price of S$2.14 on Tuesday, Lim & Tan Securities noted that the trust is capitalised at S$14.2 billion and is up 5 per cent this year to slightly beat Straits Times Index&rsquo s 3.5 per cent gain.
The brokerage on Wednesday morning noted that the consensus one-year target of S$2.23 implies a potential upside of just 4.2 per cent.
This, coupled with a &ldquo higher for longer&rdquo terminate rate outlook as well as fair valuations, has prompted Lim & Tan to downgrade its call on CICT to &ldquo hold&rdquo .
Meanwhile, Citi&rsquo s Lee noted that CICT is expected to see a &ldquo slight negative share price reaction&rdquo following the earnings miss.
very good. 4 quarters of improving dpu. current 5.36cents.
best part property value increased by 8+%. property is a natural hedge against inflation.
best part property value increased by 8+%. property is a natural hedge against inflation.
NEWS RELEASE For immediate release
CICT?s 2H 2022 distributable income up 4.8% to S$355.1 million
▪ Better performance driven by new acquisitions and improved operating
metrics
▪ Anchored by proactive portfolio value creation and cost management
Singapore, 1 February 2023 ? CapitaLand Integrated Commercial Trust Management
Limited (CICTML), the manager of CapitaLand Integrated Commercial Trust (CICT or the
Trust), today reported a distributable income of S$355.1 million for the six months ended 31
December 2022 (2H 2022), an increase of 4.8% year-on-year (y-o-y) compared to the S$338.8
million in 2H 2021. 2H 2022 distribution per unit (DPU) was 5.36 cents, up 2.7% y-o-y. The
record date for 2H 2022 DPU is Thursday, 9 February 2023, and Unitholders can expect to
receive the payout on Friday, 17 March 2023.....
https://links.sgx.com/1.0.0/corporate-announcements/NPGPTTY3O4CQ1PLJ/745408_01_a_News%20Release_CICT%20FY%202022%20Financial%20Results.pdf
CICT?s 2H 2022 distributable income up 4.8% to S$355.1 million
▪ Better performance driven by new acquisitions and improved operating
metrics
▪ Anchored by proactive portfolio value creation and cost management
Singapore, 1 February 2023 ? CapitaLand Integrated Commercial Trust Management
Limited (CICTML), the manager of CapitaLand Integrated Commercial Trust (CICT or the
Trust), today reported a distributable income of S$355.1 million for the six months ended 31
December 2022 (2H 2022), an increase of 4.8% year-on-year (y-o-y) compared to the S$338.8
million in 2H 2021. 2H 2022 distribution per unit (DPU) was 5.36 cents, up 2.7% y-o-y. The
record date for 2H 2022 DPU is Thursday, 9 February 2023, and Unitholders can expect to
receive the payout on Friday, 17 March 2023.....
https://links.sgx.com/1.0.0/corporate-announcements/NPGPTTY3O4CQ1PLJ/745408_01_a_News%20Release_CICT%20FY%202022%20Financial%20Results.pdf
When annouce results?
Twitter&rsquo s potential exit from CapitaGreen to have &lsquo immaterial&rsquo impact on revenue
TWITTER&rsquo S potential exit from its office space at CapitaGreen will have an &ldquo immaterial&rdquo impact on CapitaLand Integrated Commercial Trust&rsquo s (CICT) portfolio revenue, said the real estate investment trust on Friday (Jan 13) in response to queries from The Business Times (BT).
Based on reports from 2015, Twitter holds an office space of 22,000 square feet in CapitaGreen, a 40-storey Grade A office tower located in the central business district (CBD). The company had reportedly expanded, leasing an additional floor in the building in Q4 2021.
Twitter is one of CapitaGreen&rsquo s top three tenants by gross rental income, according to CICT&rsquo s website.
A spokesperson from CICT told BT on Friday that CapitaGreen contributed about 6.7 per cent to the Reit&rsquo s H1 2022 net property income.
In its Q3 2022 business update, CICT said no single tenant contributes more than 5.1 per cent of its total gross rental income.
The report showed that the percentage of CICT&rsquo s total gross rental income generated by its top 10 tenants that quarter &ndash such as RC Hotel, WeWork Singapore, Temasek and BHG &ndash ranged from 1 per cent to 5.1 per cent. This puts Twitter&rsquo s contribution to the Reit&rsquo s total gross rental income at less than 1 per cent in Q3 2022.
Friday&rsquo s statement follows media reports that workers at Twitter&rsquo s Singapore office were told to empty their desks, vacate the premises and resume their duties remotely.
CICT&rsquo s spokesperson emphasised that Twitter remains a tenant of CapitaGreen.
&ldquo Singapore CBD is a thriving hub for diversified business sectors and continues to see leasing interests from various industries,&rdquo said the spokesperson.
heng ah. link reit from hk buy the jurong point and thomson plaza.
this trust should concentrate on digesting the recently purchase and commision office building.
pay down some debt is better to build confident. no point keep buy sell building and pay more
money to manager and take on more debt to unit holders dis advantage.
digest first before eating again better. wonder full impact of capita green will be how many cents per unit.
this trust should concentrate on digesting the recently purchase and commision office building.
pay down some debt is better to build confident. no point keep buy sell building and pay more
money to manager and take on more debt to unit holders dis advantage.
digest first before eating again better. wonder full impact of capita green will be how many cents per unit.
think not to worry too much on interest rate increased.
with increased foot fall and the inflation rate and food stall increasing price of 10-30% the renewal rental will be at least 5%. that will pass right thru as profit before interest. so think can more then off set interest rate increased. increasing occupancy will also increased dpu.
important is they continue to manage the malls and offices as locations in demand.
with increased foot fall and the inflation rate and food stall increasing price of 10-30% the renewal rental will be at least 5%. that will pass right thru as profit before interest. so think can more then off set interest rate increased. increasing occupancy will also increased dpu.
important is they continue to manage the malls and offices as locations in demand.
Yes, wait for next opportunity to buy under 1.8 again 😁 👍 👍
Stocky901 ( Date: 28-Oct-2022 13:59) Posted:
|
Suntec Reit is down 8.5% today.
The market never offers a chance.
Currency risk and the global economy have a serious influence.
The market never offers a chance.
Currency risk and the global economy have a serious influence.
Thank for correcting my mistake.
paul1688 ( Date: 27-Oct-2022 10:12) Posted:
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For CICT, for every 1% interest hike approx reduction in DPU is 0.3 cents. Not $0.30. Big difference.
fatpig ( Date: 26-Oct-2022 19:11) Posted:
|
According to the index below, the market is not fearful or panicked.
US repo - over 2 trillion dollars
Index of fear and greed -55
VIX - 28
The value of each REIT must be carefully considered. Keep a close eye on outside issues like inflation, the world economy, and currency war.
US repo - over 2 trillion dollars
Index of fear and greed -55
VIX - 28
The value of each REIT must be carefully considered. Keep a close eye on outside issues like inflation, the world economy, and currency war.
lukewong82 ( Date: 27-Oct-2022 07:54) Posted:
|
Next year ppl will say they miss the boat, why CICT under $2 that time I never buy???
Then they will start chasing CICT when is over $2 next year :)
This type of thing keep repeating.. that why most investor not earning becos they buy high and sell low.
The ones earning are those who buy low (fear in the air) and sell high (greed in the air)
Then they will start chasing CICT when is over $2 next year :)
This type of thing keep repeating.. that why most investor not earning becos they buy high and sell low.
The ones earning are those who buy low (fear in the air) and sell high (greed in the air)
lukewong82 ( Date: 27-Oct-2022 07:52) Posted:
|
U may be wrong... :)
Canada bank already rate hike at a lesser pace. all getting cold feet and the the past huge rate hikes take
about 6 to 9 mths to see the effect. So now FED is going to reduce the rate hike liao. U know share market is
forward looking. So next year will see rate cuts as the impact of the previous rate hikes start to bite..
When u see everyone saying 2023 gone case, max fear is out there, BUY WHEN THERE IS FEAR :)
Last year when u see everyone saying Tesla will hit $2000, u know max greed was out there, SELL WHEN THERE IS GREED.
Smart investors will buy in max fear environment ahead of the rest.. 2023 wil be a bull run liao.. then those who bought now will sell when there is greed
http://www.skynews.com.au/business/markets/bank-of-canada-makes-surprise-rates-decision/video/7bb5590ca811c6274b0a2ccb89d0df19
CommSec&rsquo s Tom Piotrowski says the Bank of Canada has made a &ldquo surprise decision&rdquo by raising rates half of a percent rather than
three-quarters of a per cent as expected.
&ldquo They have been one of the more steadfast central banks around the world in terms of proposing a higher rate increases (sic),&rdquo he told Sky News Australia.
Presented by CommSec.
Canada bank already rate hike at a lesser pace. all getting cold feet and the the past huge rate hikes take
about 6 to 9 mths to see the effect. So now FED is going to reduce the rate hike liao. U know share market is
forward looking. So next year will see rate cuts as the impact of the previous rate hikes start to bite..
When u see everyone saying 2023 gone case, max fear is out there, BUY WHEN THERE IS FEAR :)
Last year when u see everyone saying Tesla will hit $2000, u know max greed was out there, SELL WHEN THERE IS GREED.
Smart investors will buy in max fear environment ahead of the rest.. 2023 wil be a bull run liao.. then those who bought now will sell when there is greed
http://www.skynews.com.au/business/markets/bank-of-canada-makes-surprise-rates-decision/video/7bb5590ca811c6274b0a2ccb89d0df19
Bank of Canada makes &lsquo surprise&rsquo rates decision
2 hours ago
CommSec&rsquo s Tom Piotrowski says the Bank of Canada has made a &ldquo surprise decision&rdquo by raising rates half of a percent rather than
three-quarters of a per cent as expected.
&ldquo They have been one of the more steadfast central banks around the world in terms of proposing a higher rate increases (sic),&rdquo he told Sky News Australia.
Presented by CommSec.
Ling9345 ( Date: 27-Oct-2022 07:31) Posted:
|
Agreed. Stay cash rich.
Ling9345 ( Date: 27-Oct-2022 07:31) Posted:
|
2023 is no good for all sectors.
Estimated DPU Reduction has begun, with a reduction of $0.30 assuming an annual increase in interest rates of 1.0% " only" .
The year 2023 is not looking good for REITs.
The year 2023 is not looking good for REITs.
vicloo ( Date: 26-Oct-2022 18:56) Posted:
|
Yes, it is unlike for CICT to stand above 1.9 until rate hike is stopped.
chengwh1 ( Date: 26-Oct-2022 12:14) Posted:
|
Things that caught my eye in these times of turmoil,...
1) On slide 14, the calculation for Estimated DPU Reduction has started, -0.30c as at 30 Sep 2022.
2) On slide 30, Timing Gap between NPI and Distributable Income Contribution Expected to Narrow by 2Q 2023.
Will 2) above be able to offset the effects from 1) above ?
As I was writing the above, the article before my posting here was posted. Mentioned in the first para : ' additional cashflow from committed leases' ,...Whatever the case, a REIT still has to compete with safer instuments for returns to investors. As long as the riskfree rates keep going-up, the share plunge will be affected negatively.
1) On slide 14, the calculation for Estimated DPU Reduction has started, -0.30c as at 30 Sep 2022.
2) On slide 30, Timing Gap between NPI and Distributable Income Contribution Expected to Narrow by 2Q 2023.
Will 2) above be able to offset the effects from 1) above ?
As I was writing the above, the article before my posting here was posted. Mentioned in the first para : ' additional cashflow from committed leases' ,...Whatever the case, a REIT still has to compete with safer instuments for returns to investors. As long as the riskfree rates keep going-up, the share plunge will be affected negatively.
RHB upgrades CICT to &lsquo buy&rsquo on recovery prospects
RHB expects four of CapitaLand Integrated Commercial Trust' s key assets, including CapitaSpring (above), to experience a significant increase in cash flow in FY2023.
CAPITALAND Integrated Commercial Trust (CICT) is likely set for a recovery in 2023, with additional cash flow from committed leases and despite a plunge in share prices in the last month, said RHB.
In a report on Tuesday (Oct 25), analyst Vijay Natarajan upgraded the real estate investment trust (Reit) to a &ldquo buy&rdquo call and raised its target price to S$2.30 from S$2. This came after the Reit on Friday posted an increase in quarterly gross revenue and net property income.
The new target price implies a potential upside of 15 per cent from its trading price on Friday of S$1.74.
According to Natarajan, the Reit&rsquo s current performance indicates that the benefits from Singapore&rsquo s reopening continue to outweigh costs and inflationary pressures for CICT. For instance, its net profit value rose 12.7 per cent quarter on quarter and 8.4 per cent year on year, spurred by higher revenue from the Reit&rsquo s office and integrated portfolios as well as acquisition contributions.
Meanwhile, CICT&rsquo s projected distribution per unit between FY2022 and FY2024 was lowered by 3 to 4 per cent, to factor in higher financing costs and to moderate its growth in rental. This is because 12 per cent and 17 per cent of CICT&rsquo s debt is due for expiry in FY2023 and FY2024, respectively and its portfolio asset value is likely to hold firm, the analyst said.
That being said, Natarajan expects CICT&rsquo s revenue to be boosted by a further 1 to 2 per cent as it gradually rolls out higher service charges, offsetting rising costs and mitigating inflationary pressures.
Natarajan also predicts that four of CICT&rsquo s key assets at CapitaSpring, Six Battery Road, Capital Tower and Asia Square Tower 2 will experience a significant increase in cash flow in FY2023, as 15 per cent of its committed occupancy begin to fully contribute in rent and income.
Therefore, while CICT&rsquo s shares are expected to remain volatile in the near term &ndash with prices plunging 16 per cent in the last month, similar to its peers &ndash Natarajan believes its current share price is still a good entry point for the long term.
&ldquo We remain cautiously optimistic on the Reit&rsquo s 2023 outlook,&rdquo he said.