CGS International
August 5, 2025

CapitaLand Integrated Commercial Trust: Robust 1H25 Results, Strategic Expansion with CapitaSpring Acquisition, and ESG Leadership

Overview and Key Highlights

CapitaLand Integrated Commercial Trust (CICT) continues its strong performance trajectory in Singapore’s REIT sector, reporting a resilient set of 1H25 results and announcing a strategic move to acquire the remaining 55% of CapitaSpring. With a diversified portfolio spanning retail, office, and integrated developments, CICT remains a top pick for investors seeking stable returns and exposure to Singapore’s prime commercial assets.

• 1H25 DPU: 5.62 Scts, up 3.5% year-on-year, representing 50.6% of FY25 forecast.
• Acquisition: CICT to purchase the remaining 55% stake in CapitaSpring at S\$1.045bn, raising total ownership to 100%.
• Maintain Add rating; Target Price unchanged at S\$2.45.
• Aggregate leverage at 37.9%, with all-in debt cost averaging 3.4%.
• Portfolio committed occupancy at 96.3% (retail: 98.6%, office: 94.6%, integrated: 97.8%).

1H25 Performance Review

CICT reported 1H25 revenue of S\$787.6 million and net property income (NPI) of S\$579.9 million, reflecting marginal declines of 0.5% and 0.4% year-on-year, respectively. The slight dip was mainly due to the sale of 21 Collyer Quay; on a like-for-like basis, revenue and NPI grew by 1.4% and 1.7%. Distributable income surged 12.4% to S\$411.9 million, bolstered by contributions from ION Orchard and reduced interest expenses.

• Retail achieved a +7.7% rental reversion, led by suburban malls (+8.8%).
• Shopper traffic increased by 3.4% year-on-year, while tenant sales slipped marginally by 0.2% (excluding ION Orchard).
• Office segment recorded a +4.8% rental reversion, with strong new demand from consultancy, energy & resources, and IT & telecom sectors.

Asset Enhancement Initiatives (AEIs) and Portfolio Growth

CICT’s proactive asset management is set to continue driving growth. Post-IMM Building’s AEI, two new enhancement projects are planned:

• Tampines Mall: Main entrance rejuvenation and tenant mix refresh (S\$24m investment, 4Q25F–3Q26F).
• Lot One Shoppers Mall: Addition of 15,000 sq ft of lettable area via carpark conversion (4Q25F–1Q27F).

Both projects are expected to deliver ROI above 7%, underscoring management’s confidence in organic growth.

Strategic Acquisition: CapitaSpring

CICT’s proposed acquisition of the remaining 55% of CapitaSpring (an office and retail tower with 673,300 sq ft and 99.9% committed occupancy) will bring its ownership to 100%. The agreed property value stands at S\$1.9 billion. Notably:

• The acquisition is set to boost proforma 1H25 DPU by 1.1% and lift gearing by 0.4 percentage points to 38.3%.
• The purchase will be partly funded by a private placement of at least S\$500 million.
• Post-acquisition, CICT’s portfolio AUM is expected to reach S\$27 billion, with 95% Singapore-centric assets.

Financial Summary and Key Metrics

Peer Comparison: Singapore REIT Sector

Here’s a summary of CICT’s key competitors across various REIT segments, with focus on dividend yields, leverage, and market cap:

ESG Leadership and Sustainability Initiatives

CICT stands out for its commitment to ESG, securing a ‘B’ overall score for 2023, with ‘B+’ in Environmental and Governance, and an ‘A+’ rating for ESG controversies. The trust is aligned with CapitaLand Investment’s Net Zero ambitions by 2050, targeting significant reductions in carbon emissions, energy, and water intensity by 2030. Key ESG milestones include:

• 99% Green Mark certified portfolio by gross floor area (end-FY23).
• 10% reduction in absolute Scope 1 & 2 GHG emissions and 19% cut in carbon emissions (vs. 2019 baseline).
• 15% reduction in energy and water consumption intensity.
• Over 90% of Singapore properties by NLA on green leases.
• Introduction of green fit-out guides and sustainability best practices for tenants.

While ESG progress is not currently reflected in valuations, it is anticipated to become a key differentiator for discerning investors.

Balance Sheet and Cash Flow Review

CICT’s balance sheet remains robust, with total investments projected to reach S\$25.4 billion in 2027. Key ratios highlight prudent capital management and ample liquidity:

• Net property income margin: 73%+ (2025–2027F).
• Gross interest cover: Rising from 3.13x (2025F) to 3.38x (2027F).
• Current ratio: 0.15 (2025–2027F).
• Dividend payout ratio: 102–103% (2026–2027F).

Top Shareholders and Analyst Coverage

• Major Shareholders: CapitaLand (26.2%), Blackrock (3.4%), State Street Corp (3.3%).
• Analyst Ratings: 14 Buys, 3 Holds, 0 Sells.

Conclusion: Investment Outlook and Risks

CICT remains an attractive investment backed by a diversified, Singapore-centric portfolio, stable income, and a proactive approach to asset enhancement and ESG leadership. The pending CapitaSpring acquisition is set to enhance distributable income and reinforce its market dominance. While the outlook is strong, investors should monitor rental recovery, potential cost escalations in AEIs, and operational headwinds as possible downside risks.

With a forward dividend yield of 4.96% (2025F) rising to 5.49% (2027F), and an Add rating reaffirmed by CGS International, CICT stands out as a resilient REIT delivering both income and growth for shareholders.

Appendix: Singapore REIT Peer Group Overview

CICT’s leadership in the retail and integrated commercial segment, alongside a diversified REIT landscape in Singapore, offers investors a comprehensive selection of yield-generating assets, each with unique sectoral strengths and risk profiles.