CapitaLand Integrated Commercial Trust Sees Higher Profits From Office Assets

SINGAPORE – CapitaLand Integrated Commercial Trust (CICT) announced that the financial performance of its office properties improved during the April to June quarter, according to local bourse filings published on Tuesday morning (1 August, SGT).

For instance, gross revenue from CICT’s office properties rose to S$129 million in Q2 2023 from S$117.4 million during the same period a year ago, while net property income (NPI) from these assets increased to S$94.2 million from S$89 million previously.

At the same time, gross revenue from the trust’s mixed-use commercial properties climbed to S$117.3 million from S$97.1 million, whereas NPI improved to S$84.2 million from S$69.1 million.

Overall, CapitaLand Integrated Commercial Trust’s NPI and gross revenue respectively grew by 10.1 percent and 12.7 percent to S$552.3 million and S$774.8 million during the first half of the year.

Of the S$774.8 million gross revenue, 27.7 percent came from office assets located in Singapore’s central business district (CBD), while another 5.8 percent were generated by office properties situated elsewhere in the city-state. The latter consist of Funan, Raffles City Singapore, and The Atrium@Orchard.

Moreover, the committed occupancy rates of CICT’s office properties rose to 95.4 percent in Q2 2023 from 94.8 percent during the previous quarter, while that for its integrated commercial properties increased to 96.7 percent from 96.2 percent.

At the end of the second quarter, the weighted average lease expiry (WALE) of CapitaLand Integrated Commercial Trust’s office portfolio stood at 3.6 years, while that for its mixed-use commercial developments hovered at 5.3 years.

CapitaLand Integrated Commercial Trust revealed that during the first half of the year “it successfully converted leasing enquiries into commitments and strengthened tenant relationships by signing” about 0.5 million sq ft of new office leases and renewals. This resulted in a positive office rental reversion of 9.6 percent during H1 2023.

CICT said its office portfolio witnessed the addition of new tenants, mainly from the financial services, business consultancy, and legal sectors. Notably, global payments startup Nium has committed to occupy office space at Capital Tower.

However, office rental growth in Singapore is forecasted to moderate during the second half of the year because of new office completions, slowing demand, and sluggish economic growth.