Dear Unitholders 2023 was a challenging year marked by heightened interest rates and inflationary pressures, against the backdrop of ongoing geopolitical tensions. The prevailing uncertainties have resulted in uneven growth across economies. In the markets where CICT operates in, Singapore and Australia achieved a YoY gross domestic product (GDP) growth of 1.1% and 1.5% respectively while Germany posted a decline of 0.3% YoY. Despite headwinds, we continued to focus on our key markets - Singapore, which accounts for 93.7% of our portfolio value, and Australia andGermany, whichmakes up 3.6% and 2.7% of our portfolio value respectively. To navigate the challenging environment, we prioritised driving organic growth through proactive portfolio management, prudent cost management and discipline in capital management. ELEVATING PERFORMANCE, PUNCHING ABOVE OUR WEIGHT Our diversified portfolio proved resilient, recording improvements in financial and operational performance across our retail, office and integrated development sectors. CICT’s aggregate portfolio property value grew 1.2% YoY to S$24.5 billion, based on our proportionate interests in the investment properties and joint ventures as at 31 December 2023. The uplift in the portfolio property value was largely driven by better operating performance in Singapore. This growth was partially offset by a drop in overseas portfolio values, impacted by an expansion in capitalisation rate for Australia and increase in terminal capitalisation rates for Germany. Our portfolio NPI yield maintained at 4.6%1 in FY 2023. CICT's gross revenue grew at a strong 8.2% YoY to S$1.6 billion. NPI was also up 7.0%YoY to S$1.1 billion. This was supported by resilient operational performance from existing assets, full year contributions from acquisitions in Australia and 70.0% interest inCapitaSky that were completed in 1H 2022. Coupledwith prudent cost management, CICT delivered a distributable income of S$715.7 million in FY 2023, up 1.9% YoY. This translated to a DPU of 10.75 cents for Unitholders, an increase of 1.6% YoY. The total return for the year was 6.3%2. A distribution reinvestment plan was announced for CICT’s 2H 2023 distribution, providing our Unitholders with the option to receive their distribution in units or a combination of units and cash in lieu of the cash amount of distribution. MANAGING RISING OPERATING EXPENSES In 2023, escalating costs driven by inflationary pressure was a key focus, even as we managed our expenses prudently. To address rising operating costs such as utilities and manpower for CICT's Singapore portfolio, we have increased service charges progressively starting from October 2022. In addition, a change in leasing commission fee structure and cost reimbursement to a performancebased structure forged a tighter alignment between the Singapore property managers and CICT’s interests. This change will also lead to better revenue and cost alignment over time. Under the new Singapore Property Management Agreement approved by Unitholders in April 2023, leasing commission fees are paid only when leases are signed instead of reimbursement by headcount. Lastly, leveraging our scale, we were able to benefit from bulk tender optimisation such as implementing smart building features and automation initiatives. We have also secured an energy contract to better manage our utilities costs, with rates that are lower compared with the average rate for FY 2023. Most of our properties in Singapore will enjoy these lower rates till the end of 2024. Other than prudent cost management efforts across the portfolio, the team is also constantly reviewing measures to improve our resource and portfolio efficiency. 1 Based on NPI (including CICT’s 45.0% interest in CapitaSpring) over total property value in FY 2023 (based on our proportionate interests in the investment properties and joint ventures as at 31 December 2023). 2 Total return is based on the capital gains (based on the difference in the closing unit price on the last trading day of 2022 and 2023) and the total distributions announced for FY 2023 over the closing unit price on the last trading day of 2022. 6.3% Total Return for FY 20232 ANNUAL REPORT 2023 27 Overview Leadership Performance Framework Other Information
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