CapitaLand Integrated Commercial Trust - Annual Report 2021

PRIME ORCHARD ROAD AND PRIME SUBURBAN MONTHLY RENTAL VALUES ORCHARD ROAD CAPITAL VALUE 11 AND NET YIELD Capital Values The investment market for retail assets in 2021 was weaker than that of 2020, with a decrease of 30.8% to S$0.8 billion in 2021. Major retail investment transactions in 2021 included the sale of YewTee point by Frasers Centrepoint Trust to a fund managed by DWS at S$220.0 million (S$2,986 psf), to streamline its portfolio in larger dominant malls and free up funds for acquisitions. Lendlease Global Commercial REIT further increased its effective stake in JEM to 31.8% for S$337.3 million (S$2,328 psf). In 2H 2021, Firmus Capital acquired Le Quest Mall from Qingjian Realty at S$139.4 million (S$2,159 psf) and Sheng Siong Group bought over the unit that it is currently occupying at New World Centre for S$17.3 million (S$895 psf). As the market outlook continues to be clouded with uncertainties, investors are compelled to exercise prudence in their decisions. In 4Q 2021, CBRE estimates Orchard Road capital values to have decreased by 2.9% y-o-y to S$7,300 psf and net yields to have decreased by 6 basis points (bps) y-o-y to 4.81%. CBRE expects investors to remain optimistic about recovery and growth, given the expected economic growth and the gradual reopening of borders with the VTL in 2H 2021, and to double down on quality retail assets that are constrained in their supply. 11 Capital Value reflects the revision in CBRE basket. Rents reflect the revision of CBRE’s basket from 1Q 2017 onwards. Source: CBRE Singapore, 4Q 2021 Source: CBRE Singapore, 4Q 2021 42.0 40.0 38.0 36.0 34.0 32.0 30.0 28.0 8,400 8,200 8,000 7,800 7,600 7,400 7,200 7,000 6,800 6,600 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 Rental Values (S$ psf) Capital Value (S$ psf) Prime Orchard Road Prime Suburban Orchard Road Capital Value (LHS) Orchard Road Net Yield (RHS) $38.16 $29.30 $38.64 $29.65 $38.64 $29.65 $35.60 $29.50 $34.20 $30.10 5.0 5.0 4.9 4.9 4.8 4.8 4.7 4.7 Net Yield % $8,252 $8,251 $8,251 $7,519 $7,300 Annual Report 2021 105 Independent Market Review