CapitaLand Integrated Commercial Trust (SG:C38U) posted upbeat results for the full year Fiscal 2023, with DPU (distribution per unit) rising 1.6% due to higher occupancies and increased rental rates. CapitaLand Integrated Commercial Trust (CICT) is the first and largest real estate investment trust (REIT) listed on the Singapore Exchange.
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CICT owns and invests in quality income-producing assets in retail and office spaces, predominantly in Singapore.
CICT’s Impressive Fiscal 2023 Results
For FY23, CICT’s gross revenues jumped 8.2% to S$1.6 billion, while NPI (net property income) grew 7% to S$1.1 billion. Analysts expected the REIT to post a revenue jump of 6.1% and NPI growth of 5.9%. CICT attributed the solid performance to improved contributions from the Raffles City Singapore property and contributions from properties acquired in 2022.
In the second half of 2023, DPU rose 1.7% to S$0.0545, backed by a 4.1% year-over-year gross revenue growth and a 4% increase in NPI. Further, distributable income for the second half was up 2.1% to S$362.5 million. CICT is set to pay its H2 FY23 dividends (DPU) on March 28, 2024, to shareholders on record on February 15.
Overall, CapitaLand Integrated’s full-year DPU rose 1.6% to S$0.1075, with distributable income growing 1.9%. CICT offers a dividend yield of 5.2%.
CICT delivered strong results despite experiencing increased borrowing rates due to a high interest rate environment in 2023. Moreover, property operating expenses remained elevated owing to higher utility, maintenance, and marketing expenses.
Looking ahead, CapitaLand Integrated acknowledges that macro challenges remain. Nonetheless, it expects to deliver consistent performance in 2024 through “proactive portfolio management, value creation, and prudent cost and capital management.”
Is C38U a Good Investment?
With two unanimous Hold recommendations, the C38U stock has a Hold consensus rating on TipRanks. The CapitaLand Integrated Commercial Trust share price forecast of S$2.02 implies 2.8% upside potential from current levels. Note that these ratings were given before the results were announced and are subject to changes once analysts review the company’s performance.
