OCBC Investment Research
5 August 2025
CapitaLand Integrated Commercial Trust: Riding the Wave of Singapore’s Commercial Real Estate Growth in 2025
Overview: CICT Positioned for Sustainable Growth
CapitaLand Integrated Commercial Trust (CICT) stands as Singapore’s largest S-REIT by market capitalization and assets, offering investors diversified exposure to both suburban and downtown retail as well as core CBD office sectors. Backed by CapitaLand Investment Limited, CICT’s scale and expertise have been significantly boosted since its merger with CapitaLand Commercial Trust in 2020. The trust has also expanded its footprint into Germany and Australia, complementing its robust Singapore portfolio.
Key Highlights from 1H25 Results
- Distribution Per Unit (DPU) Outperformance: 1H25 DPU rose 3.5% year-on-year to 5.62 Singapore cents, slightly exceeding expectations.
- Stable Operational Metrics: Retail rental reversions moderated to 7.7%, with suburban malls (8.8%) outperforming downtown malls (6.9%). Office portfolio rental reversions eased to 4.8%.
- Financial Flexibility: Aggregate leverage ratio declined 0.8 percentage points quarter-on-quarter to 37.9%, enhancing CICT’s ability to pursue inorganic growth.
- Strategic Acquisition: Proposed acquisition of the remaining 55% interest in CapitaSpring for SGD1.9 billion, aiming for an attractive NPI yield of 4.2% and high committed occupancy of 99.9%.
Investment Thesis: Why CICT Remains a Top Pick
CICT’s robust leasing momentum in the retail sector continues to underpin its performance. The Singapore office portfolio delivered positive rental reversions through FY23 and FY24, with the trend expected to continue in FY25, albeit at a slower pace due to higher expiring rents at certain properties. The reduction in aggregate leverage from 39.9% at FY23-end to 37.9% as of 2Q25 provides additional headroom for growth opportunities. Furthermore, 81% of borrowings are hedged, and the average debt maturity remains among the longest in the S-REITs sector, supporting strong financial resilience.
Financial Summary: Solid Performance and Attractive Yield
| SGD million |
FY24 |
FY25E |
FY26E |
| Gross Revenue |
1,586 |
1,516 |
1,567 |
| Net Property Income |
1,153 |
1,093 |
1,138 |
| Total Return for the Period |
941.8 |
794.5 |
852.9 |
| Distribution to Unitholders |
752.2 |
822.0 |
875.2 |
| DPU (S cents) |
10.88 |
11.23 |
11.92 |
| DPU Yield (%) |
4.9 |
5.0 |
5.3 |
| P/NAV (x) |
1.1 |
1.1 |
1.1 |
| ROE (%) |
6.3 |
5.1 |
5.5 |
| Gearing (%) |
38.5 |
38.7 |
38.9 |
Operational Performance: Retail and Office Portfolio Trends
- Retail: 1H25 retail rental reversions at 7.7% (suburban: 8.8%, downtown: 6.9%). Like-for-like tenant sales per square foot per month fell 0.2% YoY, with downtown malls up 0.3% and suburban malls down 0.4%.
- Office: Rental reversions slipped from 5.4% in 1Q25 to 4.8% in 1H25, expected to remain at mid-single digit levels.
- Portfolio Occupancy: Committed occupancy edged down 0.1 percentage points quarter-on-quarter to 96.3%. Frankfurt and Australian portfolios showed early signs of recovery.
Strategic Acquisitions and Balance Sheet Strength
CICT’s aggregate leverage improvement was supported by the divestment of its stake in the 299-unit CapitaSpring serviced residence component for SGD280 million (100% basis), achieving a tight exit yield of approximately 3.6%. The increased financial flexibility paved the way for the proposed acquisition of the remaining 55% interest in CapitaSpring. The acquisition, valued at SGD1.9 billion, is projected to deliver an NPI yield of around 4.2%. To partially fund this, CICT initiated a private placement to raise at least SGD500 million, with the transaction expected to be DPU accretive by 1.1% on a pro forma 1H25 basis. The average cost of debt remained stable at 3.4%, with expectations that it will reach the low-3% range by year-end. The assumed cost of debt for CapitaSpring is 2.7%.
Updated Fair Value and DPU Projections
In light of lower borrowing costs and a reduction in the risk-free rate assumption by 50 basis points to 2.25%, the fair value estimate for CICT has been raised from SGD2.35 to SGD2.52. Distribution per unit forecasts for FY25 and FY26 have been increased by 2.9% and 3.8%, respectively.
ESG Initiatives: Commitment to Sustainability
CICT’s ESG rating saw an upgrade in July 2022, particularly excelling in “Opportunities in Green Building.” The trust is firmly aligned with CapitaLand’s commitment to achieving net zero by 2050 and a carbon reduction target in line with the 1.5°C scenario. CICT’s ESG strategy focuses on:
- Building portfolio resilience and resource efficiency
- Enabling thriving and future-adaptive communities
- Accelerating sustainability innovation and collaboration
The trust also features board-level oversight on ethics, an independent majority board, and comprehensive anti-corruption and whistleblower protection policies.
Potential Catalysts and Investment Risks
Potential Catalysts:
- Asset divestments at prices significantly above valuation
- DPU-accretive acquisitions
- Stronger-than-expected footfall and tenant sales at malls
Key Risks:
- Macroeconomic slowdown impacting consumer and business sentiment
- Rising interest rates increasing borrowing costs
- Weaker-than-expected rental reversions
Peer Comparison: S-REITs at a Glance
| Company |
P/E (FY25E) |
P/E (FY26E) |
P/B (FY25E) |
P/B (FY26E) |
EV/EBITDA (FY25E) |
EV/EBITDA (FY26E) |
Dividend Yield (%) FY25E |
Dividend Yield (%) FY26E |
ROE (%) FY25E |
ROE (%) FY26E |
| CapitaLand Integrated Commercial Trust (CMLT.SI) |
19.8 |
19.3 |
1.0 |
1.0 |
23.8 |
23.0 |
4.9 |
5.2 |
5.4 |
5.5 |
| Frasers Centrepoint Trust (FCRT.SI) |
19.8 |
18.9 |
0.9 |
1.0 |
26.4 |
24.0 |
5.4 |
5.5 |
4.8 |
5.2 |
| Mapletree Pan Asia Commercial Trust (MACT.SI) |
17.0 |
16.5 |
0.7 |
0.7 |
19.9 |
20.1 |
6.0 |
6.2 |
4.4 |
4.6 |
| Starhill Global Real Estate Investment Trust (STHL.SI) |
12.6 |
12.5 |
0.8 |
0.7 |
16.1 |
15.9 |
7.1 |
7.2 |
6.1 |
6.0 |
| CapitaLand China Trust (CAPA.SI) |
16.2 |
16.0 |
0.7 |
0.7 |
17.1 |
16.7 |
7.1 |
7.0 |
4.1 |
4.4 |
Company Overview: Leading Player in Singapore’s Commercial Real Estate
CICT is the first and largest REIT listed on the Singapore Exchange, with a market capitalization of SGD14.1 billion as of 31 December 2024. The trust debuted as CapitaLand Mall Trust in 2002, before being renamed following its merger with CapitaLand Commercial Trust in 2020. Today, CICT’s portfolio includes 21 properties in Singapore, two in Frankfurt, Germany, and three in Sydney, Australia, totaling SGD26.0 billion in property value.
Portfolio Committed Occupancy and Distribution Trends
- Committed occupancy rates have remained high, averaging above 96% for the past several years.
- DPU has grown from 8.69 S cents in FY20 to 10.88 S cents in FY24, reflecting resilience and strong performance.
FY24 NPI Breakdown by Segment
- Retail: 36.4%
- Office: 33.6%
- Integrated Developments: 30.0%
Detailed Financials: Income Statement and Key Ratios (FY2020–FY2024)
| Year |
Revenue |
Gross Profit |
Operating Income |
Pretax Income |
Net Income |
DPU Payout Ratio (%) |
Return on Equity (%) |
Gearing (%) |
| 2020 |
745.2 |
458.7 |
887.9 |
349.7 |
349.8 |
86.32 |
3.36 |
34.2 |
| 2021 |
1,305.1 |
863.4 |
873.6 |
1,102.3 |
1,083.1 |
52.20 |
8.11 |
34.2 |
| 2022 |
1,441.7 |
947.9 |
952.6 |
730.0 |
723.4 |
82.03 |
5.22 |
32.9 |
| 2023 |
1,559.9 |
1,017.6 |
1,095.8 |
879.3 |
862.6 |
69.58 |
6.10 |
40.6 |
| 2024 |
1,586.3 |
1,049.5 |
1,071.5 |
935.3 |
933.7 |
67.22 |
6.28 |
38.5 |
Final Thoughts: CICT’s Growth Outlook Remains Bright
CapitaLand Integrated Commercial Trust’s combination of scale, operational excellence, and strategic acquisitions positions it as a leader in Singapore’s commercial real estate sector. With a robust balance sheet, proactive portfolio management, and a focus on sustainable growth, CICT is well-placed to deliver value to investors in the evolving landscape of 2025. The trust’s disciplined approach to acquisitions, commitment to ESG, and steady income distribution make it a compelling choice for income-focused and growth-oriented investors alike.
