• CapitaLand Integrated Commercial Trust’s 3Q21 gross revenue/NPI were within expectations, at 24.5%/25% of our FY21F forecasts.
• Asset enhancement plans for Raffles City Singapore are in the works.
• Reiterate ADD rating on CapitaLand Integrated Commercial Trust with an unchanged DDM-based target price.

CapitaLand Integrated Commercial Trust's 3Q21 Business Update Highlights

• CapitaLand Integrated Commercial Trust (CICT, SGX:C38U) reported 3Q21 gross revenue/NPI of S$329m/242.6m, in line, at 24.5%/25% of our FY21F forecasts. Committed portfolio occupancy slipped slightly q-o-q to 94.4% as at end-3Q21, with retail at 96.4%. Portfolio weighted average lease expiry stood at 3 years as at end-3Q21. Gearing stood at 40.9% at end-3Q21, while all-in finding cost declined q-o-q to 2.3%.

Retail Segment Recovering Gradually

• CapitaLand Integrated Commercial Trust’s 9M21 portfolio retail connectivity of the three levels. The makeover is targeted for completion by 4Q22. It is currently under advanced negotiations with key international fashion, beauty and lifestyle retailers.

High Pre-commitment Rates at CapitaSpring

• Office committed occupancy stood at 92.6% as at end-3Q. CapitaLand Integrated Commercial Trust transacted 0.17m sq ft of new gearing of 40.9%, CapitaLand Integrated Commercial Trust is well placed to tap inorganic growth opportunities.

Reiterate ADD Rating on CapitaLand Integrated Commercial Trust

• We leave our FY21-23F DPU placed to benefit from a macro recovery, given its diversified and stable earnings profile.
• Re-rating catalysts include more clarity on asset enhancement/redevelopment plans.
• Downside risks include slower-than-expected portfolio value creation and slower rental recovery outlook.
• Refer to report attached below for CapitaLand Integrated Commercial Trust's ESG metrics.

Source: CGS-CIMB Research - 22 Oct 2021