CapitaLand India Trust (CLINT)

CapitaLand India Trust (CLINT), trading at S\$1.03, reported a 6% year-on-year growth in FY2024 distribution per unit (DPU) to 6.84 Singapore cents. Its net property income (NPI) increased by 16% year-on-year in Indian Rupee (INR) terms and 14% in Singapore Dollar (SGD) terms. The trust’s committed portfolio occupancy improved to 95%, with its net asset value per unit rising by 19% year-on-year due to strategic acquisitions and higher property valuations.

Key highlights include the pre-leasing of 100% of MTB 6 at International Tech Park Bangalore to a large semiconductor tenant and progress on data center assets, with revenue contribution expected from a leading global hyperscaler by 2Q 2025. The trust’s total property income grew 21% year-on-year to INR17.4 billion, driven by contributions from newly acquired properties in Pune, Navi Mumbai, and Chennai.

As of December 31, 2024, CLINT’s assets under management grew by 20% year-on-year to S\$3.7 billion, and the gearing ratio stood at 38.5%. The trust also entered forward purchase agreements for three industrial facilities at OneHub Chennai, further diversifying its portfolio. CLINT’s completed floor area now stands at 21.9 million sq ft, with a total development potential of 7.1 million sq ft.

Currently trading at 10x forward PE and 0.75x P/B with a dividend yield of 6.3%, CLINT has a consensus target price of S\$1.31, representing a 27% upside. Lim & Tan Securities recommends an “Accumulate on Weakness” rating due to potential near-term stock weakness driven by global data center-related concerns.

AIMS APAC REIT (AAREIT)

AIMS APAC REIT, trading at S\$1.28, delivered a 4.3% year-on-year rise in distributions to unitholders and a 1.1% year-on-year increase in DPU to 7.07 Singapore cents for the nine months ending December 31, 2024. Gross revenue rose by 5.7% year-on-year to S\$139.1 million, while NPI increased by 1.9% year-on-year to S\$99.6 million, supported by positive rental reversions across all portfolio segments.

The REIT executed 19 new and 41 renewal leases, totaling 127,299 sqm, with a strong rental reversion rate of 21.2%. Logistics and warehouse properties led this growth. As of December 31, 2024, its committed portfolio occupancy stood at 96.3%, with a weighted average lease expiry of 4.7 years. The REIT’s portfolio is supported by 200 tenants, with 82.9% of gross rental income from defensive industries.

The REIT continues to progress on two asset enhancement initiatives (AEIs) at 7 Clementi Loop and 15 Tai Seng Drive, which aim to enhance long-term income. The divestment of the non-core property at 3 Toh Tuck Link, at a premium over valuation, aligns with its capital recycling strategy. AAREIT’s aggregate leverage was 33.7% as of December 31, 2024, with no debt refinancing until FY2027. The REIT also secured a sustainability-linked loan facility and hedged 72% of its AUD income into SGD.

With a market capitalization of S\$1.04 billion, AAREIT trades at a dividend yield of 7.2% and 1x book value. The consensus target price of S\$1.47 represents a 15% upside. Lim & Tan Securities maintains an “Accumulate” rating, citing its strong financial position and growth prospects.

Market Sentiment and Broader Insights

The report highlighted significant macroeconomic events, including the US Federal Reserve’s recent rate cuts, with a 25bps reduction in December 2024 marking the third consecutive cut. Inflation expectations remain a concern, with headline inflation projected at 2.4% and core inflation at 2.8% in 2025. The International Monetary Fund (IMF) held its global economic growth forecast steady at 3.2% for 2024, while cautioning against financial market volatility.

In China, Country Garden Holdings continues to grapple with the nation’s property crisis, with a record loss of 178.4 billion yuan reported for 2023. The company aims to finalize its debt restructuring plan by mid-2025. Meanwhile, US commodity markets are witnessing mixed trends, with oil prices rising due to geopolitical tensions, while copper remains lackluster.

Institutional and Retail Fund Flows

Institutional investors recorded a net sell of S\$449.0 million during the week of January 20, 2025, compared to S\$126.8 million a week earlier. Key stocks sold included DBS (S\$211.2 million) and OCBC (S\$47.4 million). In contrast, retail investors were net buyers, with inflows of S\$217.5 million, led by purchases of DBS (S\$106.7 million) and CapitaLand Investment (S\$25.2 million).

Sectors such as REITs and technology hardware/software saw significant institutional outflows, while retail investors favored financial services and industrials. A strong retail appetite for high-dividend-yield stocks further fueled positive sentiment.