CapitaLand Reits average 39% gearing with operational growth

Capitaland Investment (CLI), one of Singapore’s largest global real estate investment managers, oversees S$133 billion in real estate asset under management (RE AUM) and S$89 billion in fund under management (FUM) as of Mar 31, 2023. CLI’s fund management business includes 36 private funds and six listed real estate investment trusts (Reits) and business trusts, of which five are listed in Singapore.

CapitaLand Investment’s (CLI) Singapore-listed Reits and business trusts

1. $ASCENDAS REAL ESTATE INV TRUST(A17U.SI)$

Aside from CapitaLand Ascendas Reit (CLAR) $ASCENDAS REAL ESTATE INV TRUST(A17U.SI)$ which did not disclose financial results in a first-quarter 2023 business update, CLI noted that several of its Singapore listed funds saw year-on-year improvements in Q1 2023 financials.

2. $CapLand IntCom T(C38U.SI)$

CapitaLand Integrated Commercial Trust (CICT) $CapLand IntCom T(C38U.SI)$ ‘s Q1 2023 net property income (NPI) reached S$276.3 million, increasing 11.3 % year on year due to contribution from acquisitions completed in the first half of 2022, but offset by higher operating expenses and absence of income from JCube mall.

3. $CapLand India T(CY6U.SI)$

CapitaLand India Trust (CLINT) $CapLand India T(CY6U.SI)$ reported Q1 2023 NPI of S$42.0 million, up 5% year on year, due to higher occupancy and additional income contributions from Arshiya Warehouse 7, Industrial Facility at MWC and Block A.

4. $Ascott Trust(HMN.SI)$

CapitaLand Ascott Trust (CLAS) $Ascott Trust(HMN.SI)$ saw Q1 2023 gross profit increase by 59% year on year due to stronger operating performance and contributions from new properties.

CLI also observed significant operational improvement in the listed funds, particularly in retail and lodging sectors. Both CICT and CapitaLand China Trust (CLCT) saw double-digit year-on-year increase in shopper traffic and tenant sales. Similarly, CLAS reported 90% year-on-year increase in revenue per available unit (RevPAU) on higher occupancies and room rates.

5. $CapLand China T(AU8U.SI)$

While CLCT reported a 1.6% decrease in NPI for Q1 2023 on a year-on-year basis, it noted strong recovery momentum. CLCT’s retail occupancy increased to 96.4% in Q1 2023, up from 95.4% in Dec 2022. Shopper traffic and tenant sales increased 10.6% and 15.4% year on year, respectively.

CLI noted that all its listed funds have maintained healthy balance sheets, with well-managed debt maturity profiles and over 75% of debt based on fixed interest rates.

The five trusts have an average gearing ratio of 39% as at 31 Mar, 2023. Among them, CICT had the highest gearing ratio at 41% while CLAR had the lowest at 38%.

On average, the five trusts’ weighted average debt to maturity stood at 3.4 years as of 31 Mar, 2023, of which CICT’s was the longest at 4.2 years while CLINT’s was the shortest at 2.1 years.

https://www.sgx.com/research-education/market-updates/20230515-reit-watch-capitaland-reits-average-39-gearing-see