CapitaLand Integrated Commercial Trust (C38U) Q2 2025 earnings summary

Executive summary

• Gross revenue for 1H 2025 was S$787.6 million, down 0.5% year-over-year due to divestments, but up 1.4% on a like-for-like basis; net property income was S$579.9 million, down 0.4% year-over-year, but up 1.7% like-for-like.

• Distributable income rose 12.4% year-over-year to S$411.9 million, with DPU up 3.5% to 5.62 cents, a record high despite an enlarged unit base.

• Portfolio occupancy stood at 96.3% as at 30 June 2025, with high tenant retention and positive rent reversions in both retail and office segments.

• Higher distribution was driven by the full six-month contribution from ION Orchard, improved property performance, and lower interest expenses.

• Announced acquisition of the remaining 55% interest in CapitaSpring for S$482 million, increasing Singapore exposure to 95%.

Financial highlights

• Aggregate leverage stood at 37.9%, with an interest coverage ratio of 3.3x and average cost of debt at 3.4%; 81% of borrowings are on fixed rates.

• Net asset value per unit was S$2.13 as at 30 June 2025.

• Retail rent reversion averaged 7.7%, with suburban malls at 8.8% and downtown at 6.9%; office rent reversion was 4.8%.

• Tenant sales per square foot increased 17.9% year-over-year, mainly due to ION Orchard; excluding ION, sales were flat.

• Finance costs fell 8.7% year-over-year to S$155.0 million due to lower average cost of debt and repayment of borrowings.

Outlook and guidance

• Rental reversions expected to moderate to more sustainable levels in coming quarters, with retail and office rent reversions guided to mid-single digits.

• Full-year income contribution from ION Orchard and progressive contributions from asset enhancements at IMM Building and Gallileo are anticipated.

• Cost of debt expected to trend down to low-to-mid 3% for the full year.

• Management remains vigilant of macro headwinds and aims to secure leases ahead of expiries.

• Focus remains on sustainable growth through proactive portfolio management and prudent cost and capital management.