ADOPTING AN AGILE CAPITAL MANAGEMENT STRATEGY CICT maintained a healthy balance sheet with an adjusted NAV per unit of S$2.07, up from S$2.06 a year ago. We stayed nimble in our capital management strategy, ensuring that funding sources were well diversified to allow greater financial flexibility and agility. Our debt maturity profile was well-spread over various tenures, with an average term to maturity of 3.9 years. The average cost of debt was 3.4%, with 78% of total borrowings in fixed interest rates to mitigate interest rate movements. In FY 2023, CICT secured S$2.2 billion in sustainabilitylinked and green loan facilities as well as green bond issuances. Total outstanding sustainability-linked/ green loan facilities and green bonds were S$4.2 billion as at 31 December 2023. This accounted for 41.8% of total borrowings (including our proportionate share of borrowings in joint ventures). As at 31 December 2023, our aggregate leverage ratio was 39.9% with an average cost of debt of 3.4%. Moody’s Investors Service affirmed CICT’s credit rating at ‘A3’ and changed the outlook fromnegative to stable on 26 June 2023. S&P Global Ratings has an ‘A-‘ credit rating with a stable outlook for CICT. FORTFYING OUR PORTFOLIO, LEVERAGING OPPORTUNITIES Guided by our value creation strategy, our proactive portfoliomanagement and prudent capital management efforts yielded positive results. CICT’s portfolio delivered strong operating metrics despite economic headwinds and rising costs in FY 2023. CICT’s committed portfolio occupancy improved 1.5 percentage points to 97.3% from 95.8% a year ago. This improvement extended across all asset types, with committed occupancies for retail, office and integrated development portfolios increasing to 98.5%, 96.7% and 98.5% respectively. Capitalising on value creation for sustainable growth, we actively review asset plans to optimise our portfolio and future-proof our properties through AEIs that incorporate green features. The ongoing transformation of CQ @ Clarke Quay into a day-and-night destination is expected to renew the vibrancy of the property, drawing visitors throughout the day. We have curated a trendy mix of lifestyle and food and beverage offerings alongside nightlife entertainment at the property. Store fit-outs are progressing rapidly and scheduled to be operational by mid-2024. Slated for a S$48.0 million AEI, IMM Building will start on a four-phase enhancement works in 1Q 2024 to anchor its position as a regional outlet destination, increasing the total outlet concepts to approximately 110 post-AEI. As at 31 December 2023, we have already secured a healthy pre-commitment level of around 70% for the initial two phases of the upgrading, including leases under advanced negotiations. The rest of the mall will remain in operation during this period. In Australia, we implemented a strategic initiative to revitalise our workspaces and elevate the office environment inNorth Sydney future-proofing our assets in this submarket. Upgrading works of approximately A$9 million will transform the lobby of 101 Miller Street into a best-in-class multifunctional communal space. This new space is designed to support collaborative work, foster innovation, and provide an exceptional experience for tenants and visitors. To activate the spaces at 100 Arthur Street, we have also partnered with The Work Project to manage concierge services and flexible workspace solution at the lobby and Level 10 of the property. Gallileo in Frankfurt, Germany kickstarted its threephase AEI in February 2024. At an estimated cost of between EUR175 million and EUR215 million3, the AEI will elevate the relevance, functionality and operational efficiency with a target to achieve a minimum green rating of LEED Gold certification. A downtime of at least 18 months is expected for the AEI. RETAIL SHINES AMIDST CHALLENGES In Singapore, tourists have been returning steadily after the COVID-19 pandemic, with international visitor arrivals hitting 13.6 million in 2023. In addition, the shift towards hybrid work arrangements benefitted 3 The projected AEI cost varies depending on whether it follows a single or multi-tenanted scheme and is subject to adjustments based on the final scope of the works. Embarking on 3 asset enhancements in 2024 With the AEI at CQ @ Clarke Quay in the final stage of completion, we have lined up three upgrading and AEIs in 2024 that will further strengthen the resilience of our assets. 28 CAPITALAND INTEGRATED COMMERCIAL TRUST MESSAGE TO UNITHOLDERS
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