CapitaLand Integrated Commercial Trust Earnings: Asset Enhancement to Drive Near-Term Growth

CapitaLand Integrated Commercial Trust’s second-half 2024 performance was in line with our expectations. Net property income grew by 1.3% year over year, driven by higher rental income from existing assets, partly offset by the absence of contribution from Gallileo due to asset enhancement and the divestment of 21 Collyer Quay in November 2024. However, distribution per unit was flat year on year given an enlarged unit base following the equity fundraising exercise in September 2024. Given no surprises, we retain our fair value estimate of SGD 2.32 per unit after rolling our model and finetuning our assumptions. Based on current prices, the trust is undervalued and trades at an attractive 2025 dividend yield of 5.7%. We like their portfolio of high-quality office and retail assets and expect the completion of asset enhancement works at IMM Building and Gallileo to drive near-term growth.