CapitaLand Integrated Commercial Trust’s H2 DPU rises 9.4% to S$0.0596

[SINGAPORE] The manager of CapitaLand Integrated Commercial Trust (CICT) posted a distribution per unit (DPU) of S$0.0596 for the second half ended December, up 9.4 per cent from S$0.0545 in the year-ago period.

This brings DPU for FY2025 to S$0.1158, up 6.4 per cent year on year from S$0.1088. Based on the closing price of S$2.39 per unit on Dec 31, 2025, CICT’s distribution yield for the full year is 4.8 per cent.

CICT’s manager on Friday (Feb 6) said that the growth in H2 DPU came despite an enlarged unit base due to a private placement in August 2025.

The H2 DPU consists of an advanced distribution of S$0.0135 for Jul 1 to Aug 13, which was paid on Sep 18, 2025. The remaining DPU of S$0.0461 will be paid out on Mar 24, after the record date on Feb 16.

Rental reversion for its office and retail portfolios increased by 6.6 per cent each, based on the average rent of signed leases in FY2025.

Distributable income rose 16.4 per cent to S$449 million for H2, from S$385.7 million in the same period the year before.

The manager said the increase in distributable income was driven mainly by income contributions from Ion Orchard, the step-up acquisition of CapitaSpring’s commercial component, stronger performance from existing properties and lower interest expenses.

The increase was, however, partly offset by the divestment of 21 Collyer Quay in November 2024.

Revenue was up 4.7 per cent on the year at S$831.5 million for the half-year period, from S$794.4 million.

Net property income (NPI) grew 6.8 per cent to S$609.9 million for H2, from S$571.1 million.

“Solid all-around improvement”

The improvements in revenue and NPI were driven mainly by contributions from CapitaSpring and stronger performance from existing properties, partially offset by the divestment of 21 Collyer Quay.

Citi analyst Brandon Lee on Friday said that the H2 results demonstrated “solid all-around improvement”.

However, he noted that a sequential slowdown in rental reversions for both office and retail implied “a certain level of friction in negotiating for higher rents during the current late part of an up-cycle for both sectors”.

For the full year, CICT’s revenue was 2.1 per cent higher at about S$1.6 billion, and NPI grew 3.1 per cent to about S$1.2 billion.

The real estate investment trust’s (Reit) portfolio property value rose 5.2 per cent on the year to S$27.4 billion as at end-December 2025, driven by the better performance of the Singapore portfolio and the step-up acquisition of CapitaSpring’s commercial component.

Gains were partially offset by fair value losses arising from overseas properties. The valuation of the Australia office portfolio declined by 4.5 per cent on the year to S$445.4 million.

CICT’s adjusted net asset value per unit was S$2.09 as at end-December, up 1 per cent from S$2.07 as at Jun 30, 2025.

In FY2025, the Reit recorded positive rental reversion of 6.6 per cent for its Singapore retail portfolio and 6.6 per cent for its local office assets.

Leases that were executed in suburban malls in FY2025 saw their rental reversion grow by 7.2 per cent. These leases make up 7.4 per cent of the Reit’s retail portfolio committed leases. Leases signed at downtown malls such as Bugis Junction over the same period saw their rental reversion rise by 6.2 per cent. These leases make up 13.1 per cent of CICT’s retail portfolio committed leases.

Regarding portfolio performance, the manager noted that tenant sales per square foot in the retail portfolio rose 14.9 per cent year on year, or 1.2 per cent excluding Ion Orchard.

Occupancy for the retail portfolio remained robust at 98.7 per cent, while shopper traffic increased 20.5 per cent year on year.

The manager highlighted that Ion Orchard, acquired in October 2024, contributed to a full-year share of results of joint ventures of S$116.8 million, up from S$33.8 million a year earlier.

CICT’s portfolio occupancy stood at 96.9 per cent as at end-December, down from 97.2 per cent as at Sep 30, 2025. Its weighted average lease expiry was three years.

The Reit’s aggregate leverage as at Dec 31 stood at 38.6 per cent, down 0.6 percentage point from Sep 30, 2025. This continues to support the Reit’s financial flexibility and ability to seize growth opportunities, said the manager.

Meanwhile, CICT’s average cost of debt was at 3.2 per cent. Some 74 per cent of the Reit’s total borrowings are on fixed interest rates.

The manager noted that the debt maturity profile is well-staggered with an average term-to-maturity of four years, minimising refinancing risks in any single year.

As at Dec 31, CICT had an interest coverage ratio of 3.7 times.

Outlook

Looking ahead, chief executive officer of the manager Tan Choon Siang said the Reit has deployed “multiple growth levers” including asset enhancement initiatives, portfolio reconstitution and a new development project.

“In the third quarter of 2026, we will also embark on a new asset enhancement at Capital Tower to reposition Level 9 into a community space and create a higher-yielding food and beverage space on Level 1,” he said.

The manager also highlighted the award of the Hougang Central site, where CICT will develop the commercial component to “strengthen our foothold in Singapore and expand our retail footprint into the north-east region”.

Not only that, upgrading works at IMM Building were completed in Q3 2025 and the property has commenced progressive income contribution.

Units of CICT fell 0.4 per cent to close S$0.01 lower on Thursday at S$2.38.