CapitaLand Integrated Commercial Trust (CICT)

[butcher]

Low gearing of 30%
Average cost of debt at 2.4%
83% of loans on fixed rate
NAV @ $1.72
Yield at 6.5%

Seems CCT is a good entry now.

http://cct-trust.listedcompany.com/newsr...TEUT.3.pdf

[CY09]

Still bearish on CCT and office REITS, Guoco Tower and Marina One addition of supply are my key concerns.

Purchase of remaining 60% stake of capitagreen at 1.011 Bil will push it to higher gearing. Hopefully CCT will be able to re negotiate with Capland for a cheaper purchase price given sliding office rents.

[opmi]

Still bearish on CCT and office REITS, Guoco Tower and Marina One addition of supply are my key concerns.

Purchase of remaining 60% stake of capitagreen at 1.011 Bil will push it to higher gearing. Hopefully CCT will be able to re negotiate with Capland for a cheaper purchase price given sliding office rents.

all these asset mgrs all self-interest one. The only time they sold the assets cheaper is when they made a mistake..hahah

[CY09]

CCT has delivered a rather impressive results which shows average office rents rising due to older leases being renewed. DPU and NAV has increased. Gearing is still below 30% and slightly increased inspite of rise in NAV. Yield about 6.3%

What is intriguing is Dec 15 cap rate has not increased and they have reduced CCT's discount rate despite the rising interest rate environment and office space downturn. It seems their valuers are optimistic of the property value which will withstand the down turn in office segment.* Unable to compare their cap and discount rate table against other REITS as they are the only one who bravely publishes it and is easy to find

[gzbkel]

^^ Clearly the market don't share the same optimism about the property valuation, since it is trading at a big discount to NAV.

[cyclone]

FTSE Russell announces that there will be one change to the constituents of the Straits Times Index, following the March quarterly review. CapitaLand Commercial Trust will be added to the Index, while Noble Group will be removed. The changes take effect at the start of business on 21 March 2016.

The STI reserve list, comprising the five highest ranking non­constituents of the STI by market capitalisation, will be (in order of size) Suntec REIT, Neptune Orient Lines, First Resources Ltd., Singapore Post Ltd and Keppel REIT.

[CY09]

http://infopub.sgx.com/FileOpen/Gracious...eID=406041

Its a very expensive deal for CCT to take out part of capitaland's stake in capitagreen, CCT will have to fork out $393 Mil cash and assume additional $594 Mil of loans. The agreed value for capitagreen is in the region of $1.6 bil, not far from what we have been guessing.il

[Dividend Knight]

http://infopub.sgx.com/FileOpen/Gracious...eID=406041

Its a very expensive deal for CCT to take out part of capitaland's stake in capitagreen, CCT will have to fork out $393 Mil cash and assume additional $594 Mil of loans. The agreed value for capitagreen is in the region of $1.6 bil, not far from what we have been guessing.il

It seems like Capitaland got a better deal out of it, as is usually the case when a sponsor inject an asset into a REIT. 

The silver lining is that this acquisition is at least slightly DPU accretive and the CapitaGreen building is top quality.

[AQ.]

Just 57yrs left on land tenure and initial NPI yield of 3.2% => effective real yield after depreciation is rather low. 

(although the NPI yield will prob be higher after fit-out and occupancy normalises)

[CY09]

[Capitaland Commercial Results] http://infopub.sgx.com/FileOpen/CCT_2Q20...eID=413364

[Investmentmoat write up] http://investmentmoats.com/money-managem...t+Moats%29

Developments on the office space front shows that office rentals will hover at an average monthly rental of s$8.50-9psf for the next few years. This is due to the fact that office rentals for new premises are going at 7.50 to 10+ psf from the above blog post. And there are more supply coming and new developments are not fully pre-committed yet.

From CCT slides, current average rental for grade A is s$9.50psf, while CCT's average rental is about s$$8.90. This means we can estimate rentals to fall about $1 psf in time to come. That is about a 12% decrease. Assuming the full effect trickles down to dividends, this meas at current price of $1.615, the forward yield (in this tough environment) is about 4.7%.

Is that a fair valuation? To me, I don't think so and I will prefer a yield of about 5%.