CAPITAMALL TRUST

TICKER SYMBOL: C38U.SI
MARKET CAP: S$7.38 billion (Updated 23 July 2015)
MARKET PRICE / SHARE: S$2.13 (Updated 23July 2015)
INDUSTRY: REIT

COMPANY SUMMARY

CapitaMall Trust (CMT) is the first REIT to be listed on the SGX-ST in Jul 2002. CMT is primarily focused in investing and managing retail properties located in the suburban and downtown areas of Singapore.

THE BUSINESS

CMT earns about S$660 million of gross revenue on S$9.86 billion of total assets the Group oversees. Of which, S$7.5 billion are held as their investment properties. These investment properties consist of 16 retail malls including Junction 8, The Atrium@Orchard and Tampines Mall. Portfolio occupancy rate is at 98.8% with the top drivers of revenue coming from Plaza Singapura, Bugis Junction and IMM Building. CMT retail properties tend to be located near the MRT stations, making it accessible for commuters allow a high foot traffic within the shopping malls. In terms of the Group’s financial profile, CMT still has a relatively low leverage with a high interest coverage on its debt. Given a high investment grade rating of “A2”, it slows CMT to issue debt at a low cost.

PROPERTIES UNDER MANAGEMENT (FY2015)

1.  Tampines Mall
2. Junction 8
3. Funan DIgitaLife Mall
4. IMM Building
5. Plaza Singapura
6. Bugis Junction
7. Raffles City Singapore
8. Lot One Shoppers’ Mall
9. Bukit Panjang Plaza
10. The Atrium@Orchard
11. Clarke Quay
12. JCube
13. Bugis+
14. Westgate
15. Others

KEY OPPORTUNITIES

CMT has announced in mid Jul 2015 that the Group will be acquiring Bedok Mall for S$795 million, of which S$155 million will be issued via equity raising. The retail property is situated within one of Singapore’s largest estates (in terms of population) with a 4-storey shopping mall and a 583 unit  condominium. Property yield is expected to be around 5.1%. As at Jun 2015, Knight Frank Pte Ltd has valued the property at around S$780 million. Currently, Bedok Mall has a committed occupancy rate of 99.3% with an average shopping traffic of 1.4 million per month. The acquisition will allow CMT to diverse its property assets into the suburban area in order to capture the increasing residential population in view of upcoming private and publich residential developments in the vicinity. CMT has also announced that it is exploring to either redevelop or could potentially sell Funan IT Mall, which could be one of the key opportunities for CMT.

KEY RISKS

CMT is mainly involved with retail malls, which could have possible cannibalization in certain areas such as Jurong East with IMM, JCube and Westgate. Moreover, with the advent of e-commerce, this could see an impact on brick-and-mortar retail sales.

KEY THINGS TO LOOK OUT FOR (FY2015)

1. Underlying Business: Retail
2. Annualised Distribution Yield: 5.31%
3. Portfolio Occupancy Rate: 98.8%
4. Leverage (Debt to Asset):
5. Average Term to Maturity: 4.7 years
6. Average Cost of Debt: 3.5%
7. Issuer Rating: A2
8. Management Expense Ratio: 0.8%

TOP UNITHOLDERS (As at 23 Feb 2015)
  1. Citibank Nominees Singapore Pte Ltd: 20.90%
  2. Pyramex Investments Pte Ltd: 16.51%
  3. DBS Nominees (Private) Limited: 15.08%

Largest Ultimate Shareholder (Including Deemed Interest) –  Temasek Holdings (Private) Limited through CapitaLand Limited at: 27.98%

FINANCIAL STATEMENT

CMT1 Morningstar

CMT2

Morningstar

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All views and opinions articulated in the article were expressed in Willie’s personal capacity and do not in any way represent those of his employer and other related entities. Willie does not own any shares in the companies mentioned above.

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