CapitaLand Integrated Commercial Trust (CICT) 3Q 2025 Financial Report: Key Developments and Investment Impact

Overview

CapitaLand Integrated Commercial Trust (CICT), Singapore’s largest REIT and a proxy for the nation’s commercial property market, participated in the DBS Global Financial Markets Regional Property Conference 2026. The latest report highlights CICT’s strategic direction, financial performance, asset management initiatives, and forward outlook. The trust’s portfolio spans Singapore (95%), Germany (2%), and Australia (3%), with a total net lettable area of 12.4 million sq ft and a market capitalisation of S\$18.2 billion. Portfolio property value stands at S\$27.0 billion, with developments across integrated, retail, and office segments.

Key Financial Highlights

• Net Property Income (NPI): For 3Q 2025, NPI reached S\$294.4 million, up 1.6% YoY, while gross revenue rose to S\$403.9 million, a 1.5% YoY increase. For YTD Sep 2025, NPI was S\$874.2 million (0.2% YoY), with gross revenue at S\$1,191.6 million (0.1% YoY).
• Portfolio Occupancy: As at 30 Sep 2025, overall portfolio occupancy was a robust 97.2%, up 0.9 percentage points QoQ. Office occupancy (Singapore) increased to 98.3%, outperforming market averages.
• Aggregate Leverage: Increased to 39.2% from 37.9% in the prior quarter, reflecting recent acquisitions and investments.
• Average Cost of Debt: Marginally decreased to 3.3%, with 74% of borrowings on fixed rates. Interest coverage ratio (ICR) improved to 3.5x.
• Green Financing: 62.9% of borrowings are sustainability-linked or green loans/bonds, totaling S\$6.8 billion outstanding.
• Issuer Ratings: Maintained at ‘A3’ by Moody’s and ‘A-’ by S&P, indicating strong credit quality.
• Retail Tenant Sales: Tenant sales psf increased by 1.0% YoY (excluding ION Orchard), showing resilience amid macro uncertainties.
• Rent Reversions: Retail portfolio saw positive rent reversions of 7.8%, with downtown malls at 7.4% and suburban malls at 8.4% for YTD Sep 2025.
• Shopper Traffic: Grew 24.8% YoY, indicating strong consumer engagement and retail recovery.

Major Strategic Developments

Hougang Central Mixed-Use Development

CICT and Consortium secured the highest bid for the Hougang Central site, a landmark mixed-use development.

• Prime location integrated with Hougang MRT, new bus interchange, and town plaza.
• Project to add ~830 residential units and ~300,000 sq ft of net lettable area (NLA) for retail/lifestyle concepts.
• Direct links to North-East Line and future Cross Island Line, plus public event spaces and enhanced F&B offerings.
• Low private retail space per capita in Hougang compared to Singapore average—significant untapped demand.
• CICT will own and control 100% of commercial component (~300,000 sq ft), if awarded, reinforcing its core Singapore market presence and expanding into the Northeast region.

This is a potentially price-sensitive event, as it signals future growth, increased portfolio diversification, and access to new residential catchments.

Asset Enhancement Initiatives (AEIs)

CICT is undertaking several AEIs to drive portfolio performance and unlock asset value:

• Raffles City Tower: Refurbishment of office lobby and level 1, new end-of-trip facilities, improved transfer floor lift lobbies. Works commence 4Q 2025 and complete 4Q 2026.
• Tampines Mall: Upgrading works started Sep 2025, target completion in 3Q 2026.
• Lot One Shoppers’ Mall: Expansion of FairPrice to Basement 2, AEI begins Nov 2025, completion in 1Q 2027.
• Gallileo (Frankfurt): Progressive handover to ECB, with remaining tenants in 1Q 2026—expected to contribute more meaningfully from FY 2026.

Completion of these initiatives is expected to drive future rental growth, tenant retention, and overall asset value, with positive implications for DPU and share price.

Acquisition Update

CICT completed the acquisition of a 55% interest in CapitaSpring office for S\$1,045 million on 26 Aug 2025. CapitaSpring’s income will be consolidated on a 100% interest basis from this date, boosting future distribution income and underpinning the trust’s position in the core CBD office market.

Portfolio Performance and Leasing Trends

• Leasing Activity: Retention rate for retail leases at 80%, office at 74% in 3Q 2025. New leasing interest strong in F&B, Beauty & Health, Fashion & Accessories, Financial Services, IT, and Distribution & Trading sectors.
• Top Tenants: No single tenant contributes more than 5% of total gross rental income, with the top 10 accounting for 16.7%—indicating diversified income streams.
• New Retail Experiences: Introduction of brands such as Khao, Legendary Hong Kong, Allbirds, Flying Tiger Copenhagen, and Alice Boulangerie, among others, to drive traffic and tenant sales.
• Office Rents: Average rents for Singapore office portfolio rose 1.9% YoY to S\$10.92 psf/month, continuing upward momentum.

Capital Management and Debt Profile

• Total Borrowings: S\$10.1 billion, with well-spread debt maturities and 86.5% of assets unencumbered.
• Interest Rate Sensitivity: A 1% increase in rates would add S\$26.36 million in annual interest expense, reducing DPU by 0.35 cents.
• ICR Stress Test: CICT’s ICR remains healthy even under adverse scenarios, with adequate cushion against rising rates or EBITDA declines.

Sustainability and ESG Initiatives

• 100% Green-rated Portfolio: All properties have green certifications, with 47% at BCA Green Mark Platinum.
• Key Projects: Disinfecting filtration at CapitaGreen, solar hybrid air-conditioning at IMM, smart lighting at IMM, integrated facilities management at Bedok Mall, and use of recycled materials for road paving at Raffles City Singapore.
• Recognition: Maintained 5-Star GRESB rating, 1st in Asia for Public Disclosure (Mixed Use), Sustainalytics “Negligible Risk” (score 9.0), and multiple Singapore Corporate Awards for Best Annual Report and Investor Relations.
• Community Engagement: Numerous events supporting mental health, youth, seniors, and national causes, strengthening tenant and community bonds.

Market Information and Outlook

• Singapore Macroeconomic Outlook: GDP growth forecast for 2026 is 1-3%, with core inflation at 0.5% and unemployment at 2% (Oct 2025).
• Retail Sector: Limited new supply (2025-2028: 1.13 million sq ft), supporting resilient retail rents—Orchard Road rents up 1.7% YoY, suburban rents up 2.4% YoY.
• Retail Sales: Average monthly sales stable at S\$3.6 billion, online sales proportion at 15.8% (YTD Nov 2025).
• Tourism: YTD Oct 2025 tourist arrivals at 14.3 million, with receipts expected to outpace arrivals as Singapore pivots to higher value tourism.
• Office Sector: Grade A office rents up 2.1% YoY (3Q 2025), with modest net supply (2026-2028: 3.08 million sq ft in Central Area). Limited new supply in CBD core could support rental rates and occupancy.
• Germany/Australia: Frankfurt office market sees prime rents at €54.50/sqm/month and strong letting performance; Sydney CBD positive net absorption and rising prime rents, North Sydney faces higher vacancy due to new completions but may attract new demand.

Investor Implications

Key price-sensitive items for shareholders:

• Securing the Hougang Central development site could materially expand CICT’s portfolio, access untapped retail demand, and reinforce its market leadership in Singapore.
• Completion of CapitaSpring acquisition and AEIs at major assets will drive future income, DPU growth, and asset value.
• Strong operating metrics—high occupancy, robust tenant sales, positive rent reversions, and disciplined capital management—support a resilient outlook for FY 2025/2026.
• Continued recognition for ESG excellence and community engagement enhances CICT’s brand equity and stakeholder trust.
• Limited new retail/office supply and healthy macro trends underpin stable rents and demand for CICT’s core assets.

Investors should closely monitor the execution of the Hougang Central project, progression of AEIs, leasing momentum, and macroeconomic developments, as these factors could drive CICT’s share price and distribution payouts in the coming quarters.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell securities. The information is based on public disclosures and may include forward-looking statements subject to risks and uncertainties. Actual results may differ materially. Investors should conduct their own research and consult professional advisors before making investment decisions.

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