CapitaLand India Trust Review @ 11 August 2023

Basic Profile & Key Statistics

• Main Sector(s): Office
• Country(s) with Assets: India
  
• No. of Properties (exclude associate/fund): 15

Key Indicators

Performance Highlight

Total property income and NPI increased YoY mainly due to high occupancy and contribution from Arshiya Warehouse 7 and Industrial Facility in Mahindra World City, ITPH Block A and ITPP-H. However, income available for distribution has declined mainly due to higher finance costs and a high realized loss in net exchange differences and fair value on derivative financial Instruments. Combining the above with the enlarged unitholders base from a recent preferential offer, DPU declined by 22%.

Rental Reversion

Besides ITPC and aVance Hyderabad, rental reversion is positive for all properties.

Acquisition

The acquisition of ITPP-H was completed on 11 May.

Acquisition of Aurum Q Parc Building Q2 is expected to be completed in 3Q.

Pipeline (3rd Party Forward Purchase)

Construction for aVance 5 is completed while construction work for Casa Grande is expected to be completed by this year's end. Both the construction works for aVance A1 and Gardencity are expected to be completed by 2H 2024. Construction for Ebisu on the other hand, is expected to be completed in 2H 2025.

Development

There are 4 DC and ITPB MTB6 development projects on hand, where construction work has been started for CapitaLand DC Navi Mumbai 1, CapitaLand DC ITPH and MTB 6. The construction work for CapitaLand DC ITPB is expected to commence by 2H 2023.

Related Parties Shareholding

• REIT Sponsor's Shareholding: ± 10% from median
• REIT Manager's Shareholding: Above median by 20% or more
• Directors of REIT Manager's Shareholding: ± 10% from median

Lease Profile

• Committed Occupancy: ± 5% from median
• All income received in India Rupee
• WALE: Below median by 10% or more
• Highest Lease Expiry within 5 Years: Above median by 20% or more; Falls in 2027 and beyond, without breakdown
• Weighted Average Land Lease Expiry: Above median by 20% or more

Debt Profile

• Gearing Ratio: ± 10% from median
• Cost of Debt: Above median by 20% or more
• Fixed Rate Debt %: ± 10% from median
• Unsecured Debt %: Above median by 10% or more
• WADM: Below median by 20% or more
• Highest Debt Maturity within 5 Years: ± 10% from median; Falls in this year
• Interest Coverage Ratio: Below median by 20% or more

Diversification Profile

• Top Geographical Contribution: Below median by 20% or more
• Top Property Contribution: Above median by 20% or more
• Top 5 Properties' Contribution: Above median by 20% or more
• Top Tenant Contribution: Above median by 10% or more
• Top 10 Tenants' Contribution: Above median by 20% or more

Key Financial Metrics

• Property Yield: Above median by 20% or more
• Management Fees over Operating Distributable Income: Above median by 20% or more; $5.00 distribution for every dollar paid 
• Operating Distributable Income on Capital: ± 10% from median
• Operating Distributable Income Margin: ± 10% from median
• Operating Distributable Proportion: ± 10% from median

DPU Breakdown

• TTM DPU Breakdown
• 90.1% from Operation
• 9.9% from Management Fees Paid in Units
• TTM DPU = 90.1% of Distributable Income

Trends

• Uptrend: NAV per Unit
• Downtrend: DPU from Operation, Committed Occupancy, Interest Coverage Ratio, Property Yield, Operating Distributable Income on Capital, Operating Distributable Income Margin

Relative Valuation

• Dividend Yield: Below -1SD for 1y ; Average for 3y & 5y
• P/NAV: Average for 1y & 3y; Below -1SD for 5y

Author's Opinion

Favorable	Less Favorable
Diversified Sector	All income received in India Rupee
High REIT Manager's Shareholding	Short WALE
Long Weighted Average Land Lease Expiry	High Cost of Debt
High Unsecured Debt %	Short WADM
Low Top Geographical Contribution	Low Interest Coverage Ratio
High Property Yield	High Top Property & Top 5 Properties' Contributions
NAV per Unit Uptrend	High Top Tenant & Top 10 Tenants' Contributions
	Non Competitive Management Fees
	DPU from Operation Downtrend
	Committed Occupancy Downtrend
	Interest Coverage Ratio Downtrend
	Property Yield Downtrend
	Operating Distributable Income on Capital Downtrend
	Operating Distributable Income Margin Downtrend

As compared to the previous half-year, gross revenue and NPI have improved. However, distributable income has declined due to increased net finance expenses, tax expenses, and other trust expenses. Regarding debt, 37% is maturing this year, which could potentially poise for finance expenses to increase moving forward.

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my own findings and should not be considered as professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.