In its “first take” on CapitaLand Integrated Commercial Trust’s 1Q2026 business updates, JP Morgan says NPI’s 7.9% y-o-y to $314.4 million is within expectations, driven by the prior CapitaSpring acquisition in Aug 2025, progressive income contribution from Gallileo following handover completion in 1Q2026 and prior increases in rents.
Both retail and office reversions remain healthy at +4.4% and +6.1% respecitvely. But overall portfolio occupancy disappointed, falling 1.7% q-o-q to 95.2%. The key negative according to JP Morgan was that retail occupancy dipped to 97.8% (-0.9 pts) due to declines in downtown malls (-1.5pts to 96.8%), largely attributed to CQ @ Clarke Quay) with suburban malls relatively stable (99.2%). Office and integrated development occupancy fell q-o-q to 93.7% (-2.0pts) and 96.0% (-1.7 pts) driven by vacancies at Funan (office) and Main Airport Center in Frankfurt.
Average cost of debt fell to 2.9% (vs 3.2% at 31 Dec 2025), which is tracking below our 3.1% estimate for FY2026. Aggregate leverage edged down to 38.5% as at Mar 31, lower than the 38.6% as at Dec 31, 2025. However, following the divestment of Asia Square Tower 2 and the acquisition of Paragon, aggregate leverage is likely to rise to 39.2% on a pro forma basis.
“CICT continues to outperform expectations as based on annualising the recently declared advanced distribution of 3.98 cts implies FY2026 DPU of 12.31 cents, 2.5% ahead of Bloomberg consensus of 12.0 cents and slightly above JP Morgan’s own forecast of 12.21 cents,” says a JP Morgan report dated April 24. As a result JP Morgan maintains an overweight rating on CICT adding it is the top S-REIT.
