There are a total of 5 REITs and business trusts that are sponsored by CapitaLand Investments Ltd, and they are CapitaLand Ascendas REIT (which invests in industrial, logistics, as well as data centre assets), CapitaLand Ascott Trust (which invests in hotels and serviced residences), CapitaLand India Trust (which invests in business and logistics parks, as well as data centres), and CapitaLand Integrated Commercial Trust (which invests in commercial assets used for retail and office purposes).

Out of which, I'm invested in 3, and one of them is CapitaLand India Trust (SGX: CY6U), or CLINT for short. One of the reasons for my investment in the business trust is to tap onto the growing Indian economy.

As of 30 June 2024, CLINT's portfolio comprises 10 world-class IT business parks, 1 logistics park, 3 industrial facilities, and 4 data centre developments in India in key Indian cities such as Bangalore, Chennai, Hyderabad, Pune, and Mumbai.

Earlier this evening (24 October), CLINT released its business update for the 3rd quarter of the financial year ended 30 September 2024, and in this post, you will find my review of the business trust's key financial figures, as well as its portfolio occupancy and debt profile.

Let's begin:

Financial Performance (Q3 FY2023 vs. Q3 FY2024, and 9M FY2023 vs. 9M FY2024)

This time round, CLINT only provided a snippet of its financial performance for the 3rd quarter, as well as for the first 9 months of FY2024, and you can find them in the respective tables below:

Q3 FY2023 vs. Q3 FY2024:

My Observations: It was a strong set of results for the 3rd quarter reported by the business trust, with the top- and bottom-line recording a double-digit percentage growth.

The 12.8% year-on-year improvement in its total property income to S$68.8 million can be attributed to higher income from existing properties.

This resulted in the business trust’s net property income recording a 13.5% year-on-year growth to S$53.0 million.

9M FY2023 vs. 9M FY2024:

My Observations: For the first 9 months of FY2024, both its total property income and net property income grew by 19.5% and 18.4% respectively – which can be attributed to higher income from existing properties.

Portfolio Occupancy Profile (Q2 FY2024 vs. Q3 FY2024)

Moving on to looking at CLINT's portfolio occupancy profile, in the following table, you'll find a comparison of the stats for the current quarter under review (i.e., Q3 FY2024 ended 30 September 2024) against that reported in the previous quarter 3 months ago (i.e., Q2 FY2024 ended 30 June 2024):

My Observations: CLINT's portfolio occupancy declined slightly by 2.0pp to 94.0% – which can be attributed to a decline in the occupancy rate of ITPC (from 92% in Q2 FY2024 to 85% in Q3 FY2024), aVance Hyderabad (from 95% in Q2 FY2024 to 85% in Q3 FY2024), as well as CyberPearl (from 91% in Q2 FY2024 to 88% in Q3 FY2024).

Looking at the portfolio occupancy of the individual properties, apart from aVance II, Pune (which has an occupancy rate of 66%), ITPC and aVance Hyderabad (where they both have an occupancy rate of 85%), and CyberPearl (where it has an occupancy rate of 88%), the remaining 8 properties have an occupancy rate of at least 95%, which is very strong in my opinion.

Lease expiries are also very well-spread out – with just 3% of leases due for renewal in the final quarter of FY2024, 7% of leases due for renewal in FY2025, and 19% of leases due for renewal each year between FY2026 and FY2027. 52% of its leases will only be due for renewal in FY2028 or later.

Also, as far as rental reversions are concerned, apart from aVance Hyderabad (which has a negative rental reversion of -1%), the other properties have a positive rental reversion of between +1% and +8% – which is another positive to note.

Debt Profile (Q2 FY2024 vs. Q3 FY2024)

Similar to how I have reviewed the business trust's portfolio occupancy profile in the previous section, the table below is a comparison of CLINT's debt profile for the current quarter under review (i.e., Q3 FY2024) against that reported in the previous quarter 3 months ago (i.e., Q2 FY2024):

My Observations: Compared to the previous quarter, apart from the slight increase in aggregate leverage (which increased by 2.0 percentage points [pp] to 40.1% – which is a healthy level in my opinion), its average cost of debt saw a slight improvement (by 0.2pp to 6.0%). The same can also be said for a further increase in percentage of borrowings hedged to fixed rates at 80%.

In terms of debt maturity ahead, it is well-spread out – where it has 16.8% (or S$269.7 million) of borrowings due for refinancing in the final quarter of FY2024. Between FY2025 and FY2027, it has an average of about 17.0% of borrowings due for refinancing each year, with 32.1% (or S$516.8 million) of borrowings due for refinancing only in FY2028 or later.

Closing Thoughts

To round up, it was a resilient set of results reported by CLINT as far as its financial performance, portfolio occupancy, as well as debt profile are concerned.

CLINT's financial performance improved by double-digit percentages for both the 3rd quarter, as well as for the first 9 months of FY2024 compared to a year ago, contributed by higher income from existing properties.

As far as portfolio occupancy is concerned, even though it has dipped slightly compared to the previous quarter (by 2.0pp to 94.0% for Q3 FY2024), but most of its properties have an occupancy of at least 95%. Also, most of the new and/or renewed leases were signed at a positive rental reversion of between +1% and +8%.

The business trust's debt profile have also remained healthy – with its aggregate leverage at 40.1%, average cost of debt down by 0.2% from the previous quarter to 6.0%, and percentage of borrowings at fixed rates up to 80%.

Finally, the business trust has a semi-annual distribution policy (once when it releases its results for the 1st half of the year, and another when it releases its results for the 2nd half of the year). Hence, for the current quarter under review, no distribution payouts were declared.

With that, I have come to the end of my review of CapitaLand India Trust's business update for the 3rd quarter, as well as for the first 9 months of FY2024. I hope you have found the contents presented in this post useful. However, do note that all the opinions are purely mine which I'm sharing for educational purposes only. They are not meant as any buy or sell calls for the business trust's units. You should always do your own due diligence before you make any investment decisions.

Related Documents

• Presentation Slides

Disclaimer: At the time of writing, I am a unitholder of CapitaLand India Trust.

The post CapitaLand India Trust's Q3 FY2024 Business Update: What You Need to Know first appeared on The Singaporean Investor.