CapitaLand Integrated Commercial Trust Delivers Resilient 3Q 2025 Results, Completes CapitaSpring Acquisition and Launches Strategic Asset Enhancements

Strong Financial Performance Amid Strategic Portfolio Expansion

CapitaLand Integrated Commercial Trust (CICT) has announced its 3Q 2025 business update, highlighting robust financial performance, the completion of a significant office asset acquisition, and ambitious asset enhancement initiatives across its portfolio. Key figures include:

• Gross Revenue: S\$403.9 million, up 1.5% YoY
• Net Property Income (NPI): S\$294.4 million, up 1.6% YoY
• Portfolio Occupancy: 97.2%, a healthy 0.9 percentage point increase quarter-on-quarter
• Shopper Traffic: Up 24.8% YoY, indicating strong retail demand
• Tenant Sales: Up 19.2% YoY, with suburban malls posting a 41.2% surge and downtown malls up 0.7% (excluding ION Orchard, retail portfolio tenant sales psf rose 1.0% YoY)

Major Strategic Acquisition: CapitaSpring

A price-sensitive development for investors is the completion of the acquisition of a 55% interest in CapitaSpring office for S\$1.045 billion on 26 August 2025. This brings CICT’s ownership of CapitaSpring to 100% and is expected to provide a meaningful boost to future income streams. Investors should note the impact on both revenue and leverage ratios, as total borrowings rose to S\$10.1 billion and aggregate leverage increased to 39.2% (up 1.3 percentage points from June 2025). The full-year contribution from CapitaSpring is expected to strengthen distributions going forward.

Proactive Capital & Financial Management

CICT remains focused on prudent capital management:

• S\$300 million 7-year fixed rate notes issued at a competitive 2.25% p.a. due September 2032—supporting its green financing strategy and locking in low-cost debt.
• Interest Coverage Ratio (ICR): 3.5x, showing resilience against potential interest rate increases. A 1% rise in interest rates would increase annual interest expenses by S\$26.36 million and reduce DPU by 0.35 cents.
• Unencumbered Assets: 86.5% of total assets, providing flexibility for future financing needs.
• Sustainability-linked and green loans/bonds: S\$6.8 billion outstanding, representing 62.9% of total borrowings.

CICT maintains a solid investment-grade rating (‘A3’ Moody’s, ‘A-’ S&P), supporting investor confidence.

Asset Enhancement Initiatives (AEIs): Driving Future Value

CICT is executing multiple AEIs aimed at boosting asset value and user experience:

• Raffles City Tower: Refreshing key touch-points, refurbishing Level 1 office, and introducing end-of-trip facilities (completion by 4Q 2026).
• Tampines Mall: Upgrading works commenced in Sep 2025, scheduled for 3Q 2026 completion.
• Lot One Shoppers’ Mall: Basement 2 expansion, AEI starts Nov 2025, full completion targeted for 1Q 2027, with FairPrice as anchor tenant.
• Gallileo (Frankfurt): Progressive handover to European Central Bank (ECB) underway, with full tenant handover expected in 1Q 2026, set to drive meaningful income contribution from FY 2026.

These AEIs are likely to underpin rental growth, improve occupancy, and enhance portfolio value, which can move future share price.

Portfolio Performance: Resilient Retail and Office Metrics

• Retail Portfolio: Rent reversion +7.8% YTD September 2025, retention rate at 80%. Downtown malls saw +7.4% rent reversion, suburban malls +8.4%.
• Office Portfolio: Average rents up 1.9% YoY to S\$10.92 psf/month, committed occupancy at 96.2% (above market averages in Singapore, Germany, and Australia).
• Lease Expiry Profile: Well spread, mitigating concentration risk. Advanced negotiations underway for upcoming expiries.
• Top 10 Tenants: Contribute 16.7% of total gross rental income, with no tenant above 5%—reducing counterparty risk.

Retail Trends and New Tenant Additions

Retail sales remain robust, with most industries posting strong growth in August 2025 (Watches & Jewellery +11.2%, Supermarkets & Hypermarkets +8.7%). CICT is actively curating new retail experiences, with multiple new-to-market and new-to-portfolio F&B and lifestyle brands such as Hai Kah Lang (Michelin Bib Gourmand seafood noodles), Allbirds (sustainable footwear), Flying Tiger Copenhagen, and Sam Edelman joining its malls. These additions are expected to inject vibrancy and sustain footfall and sales momentum.

Market Outlook: Limited New Supply, Resilient Demand

The Singapore retail market is supported by limited new supply (average annual gross new supply of just 0.3 million sq ft from 2025-2028), with most future projects in fringe and outside central regions. Retail rents continue to rise (Orchard Road +1.7% YoY, Suburban +2.4% YoY). Similarly, the office market faces constrained new supply, especially in the CBD core, supporting upward rental trends (+2.1% YoY for Grade A offices). The tight supply environment is likely to underpin continued rental growth and asset value appreciation for CICT.

Sustainability and ESG Leadership

CICT’s portfolio is now 100% green-rated, with significant milestones in energy-saving initiatives and recycling (e.g., NEWBitumen using recycled plastic for roads, solar hybrid air-conditioning, smart lighting). CICT received top ESG accolades (BCA Green Mark Platinum for 47% of GFA, maintained GRESB 5-star rating and ‘A’ for public disclosure). Such leadership enhances long-term value and aligns with investor focus on sustainability.

Community Engagement and Social Initiatives

CICT continues to foster community bonds through events such as health carnivals, mental health awareness campaigns, youth festivals, and charity drives. These efforts boost the brand’s reputation and tenant/footfall engagement, indirectly supporting portfolio performance.

Potential Share Price Catalysts and Risks for Investors

Price-sensitive updates that may move the share price:

• Completion of CapitaSpring acquisition (full-year income boost, higher leverage).
• Significant AEIs underway at flagship properties, with income uplift expected from 4Q 2026 to 1Q 2027.
• Robust rent reversions and resilient sales trends amid macro headwinds.
• Strong capital management with sizeable green financing and investment-grade ratings.
• Limited new retail and office supply, supporting rental growth and asset values.
• Impressive sustainability credentials and market recognition.

Risks: Rising leverage, higher interest expenses if rates increase, macroeconomic headwinds, and execution risks for ongoing AEIs and new acquisitions.

Conclusion

CICT is well-positioned for resilient growth going into FY 2026, supported by asset enhancements, strategic acquisitions, proactive capital management, and limited market supply. Investors should closely monitor the execution of CapitaSpring integration, asset enhancement timelines, and evolving macroeconomic conditions, as these developments are likely to drive future distributions and share price performance.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or an offer to buy or sell securities. The information is based on the latest company update and public market data and may be subject to change. Investors are advised to conduct their own due diligence and consult professional advisors before making investment decisions. Past performance is not indicative of future results.

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