Chairman and CEO Message 14 CapitaLand Integrated Commercial Trust Optimising Asset Performance CICT builds portfolio resilience through the opportune timing of strategic AEIs. In FY 2024, we focused on executing three AEIs. In Singapore, an ongoing phased asset enhancement to increase the outlet offerings at IMM Building will further anchor its positioning as a regional outlet destination for both residents and foreign visitors. The revitalisation is on track to achieve a return on investment of approximately 8% based on capital expenditure of S$48 million. In Germany, an AEI of approximately EUR180 million is underway at the 38-storey Gallileo in Frankfurt’s Banking District. Our aim is to elevate the property’s attributes as a modern workspace with enhanced functionality and operating efficiency. Committed occupancy for the property reached 97.4%, with the European Central Bank signed on as an anchor tenant. In Australia, CICT completed an approximately A$9 million AEI at 101 Miller Street, transforming the lobby into a best-in-class communal space with meeting rooms, event space, and an inviting café. While plans to future-proof our portfolio are in place, we prudently balance asset requirements and capital expenditure before executing them. Navigating the Operating Environment Our portfolio maintained a high committed occupancy of 96.7%. Based on the average rent of signed leases in FY 2024, both retail and office portfolios achieved positive rent reversions of 8.8% and 11.1% respectively through proactive lease management. The signed new leases and renewals for the portfolio totalled approximately 2.2 million square feet1 (sq ft). Retail Consumer activity in Singapore remained healthy throughout FY 2024, driven by remote workers returning to the office, and various cultural and entertainment initiatives undertaken by the Singapore Tourism Board to boost tourism. Even though the strong Singapore dollar spurred outbound travel by locals, shopper traffic in our retail portfolio grew 8.7% over the previous year. Tenant sales per square foot increased 3.4% year-onyear in FY 2024 due to the two-month contribution from ION Orchard. Gross turnover rent accounted for about 7% of our retail portfolio’s FY 2024 gross rental income. Committed occupancy remained high at 99.3% for the Singapore retail portfolio. While tenant retention rate stayed high at 84.5% for our Singapore retail portfolio, we are consistently rejuvenating our tenant mix to stay competitive and relevant in the retail environment. In step with the changing interests and needs of local shoppers and tourists, we continue to introduce new-to-market and new-to-portfolio concepts and actively work with our retailers to refresh their offerings in our malls. Office Committed occupancy of CICT’s office portfolio remained stable at 94.8%, despite competition from new office building completions and cautious sentiment due to global economic uncertainties and hybrid work trends. We achieved a high tenant retention rate of 81.9% for our Singapore office portfolio. Office portfolio committed occupancy reached 97.6%, well above property consultant, CBRE’s Singapore Core Central Business District market occupancy of 94.7% as at 31 December 2024. CBRE noted that Singapore office rent growth could remain soft, with secondary spaces and uncommitted new office buildings in the pipeline. However, this could gradually improve given limited new supply in the longer term. In the challenging overseas market environment, our strategy continues to be two-fold: 1. proactive leasing initiatives to retain and attract tenants; 2. futureproofing assets through targeted enhancements to meet tenants’ evolving needs. For example, in Australia, the lobby at 101 Miller Street was enhanced to add vibrancy and facilitate the gradual return of employees to office-based work. At 100 Arthur Street and 66 Goulburn Street, the introduction of fitted-out workspaces facilitated fast, efficient office set up while mitigating fit-out costs for occupiers. 1 Included the leases of approximately 430,700 sq ft committed for Gallileo in 2024 which are largely contributed by the European Central Bank. 2.2 million sq ft1 New leases and renewals signed in FY 2024
RkJQdWJsaXNoZXIy NTkwNzg=