There Are 10 Things You Must Know About CapitaLand Mall Trust
CapitaLand Mall Trust (CMT) was listed as the first retail REIT on the SGX in July 2002. Today, it remains as the biggest retail REIT in Singapore with a portfolio of 15 assets valued at S$ 10.3 billion. In this article, I’ll cover 10 main things that you need to know about CMT before you invest.
#1: Stock Symbol
Ticker Symbol: SGX: C38U
Market Capitalization: S$ 7.20 billion (22 June 2018)
Share Price: S$ 2.03 (22 June 2018)
#2: The Portfolio
The 5 largest properties in CMT’s portfolio are as followed:
- Plaza Singapura
It is located at Orchard Road and linked to the Dhoby Ghaut MRT. It offers 7 levels of retail spaces which are fully occupied by key tenants such as Golden Village, Cold Storage, Kopitiam and Yamaha. In 2017,
Plaza Singapura was valued at S$ 1.28 billion and had contributed S$ 66.7 million in net property income (NPI). Thus, it is the key income contributor to CMT.
- Bugis Junction
It is a modern fashion destination mall linked to the Bugis MRT. The mall enjoys a 99.3% occupancy rate with major tenants such as BHG, Auric Pacific, Cold Storage, Wing Tai Retail Management, and Japan Food Holdings. In 2017, it was valued at S$ 1.07 billion and has made S$ 61.1 million in NPI. Therefore, it is the second biggest contributor of income to CMT.
- Tampines Mall
It is a leading suburban mall located at Tampines. It offers a total of five levels of retail spaces with key tenants such as NTUC Enterprise, Isetan, H&M, Golden Village, and Kopitiam. It is now fully occupied. In 2017, it was valued at S$ 1.05 billion and has made S$ 58.3 million in NPI. Thus, it is the third largest income contributor to CMT.
- IMM Building
Connected to the Jurong East MRT, the IMM Building is the biggest outlet mall in Singapore. It consists of 5 levels of mixed development of retail, warehouse, and office spaces. Its overall occupancy rate was 93.4% with main tenants such as Best Denki, Kopitiam, Cold Storage, and Daiso. In 2017, it was valued at $ 641 million and has contributed S$ 57.2 million in NPI. Thus, this property is the fourth largest source of income to CMT.
- Junction 8
It is a suburban mall connected to the Bishan MRT. It offers a total of five levels of retail spaces with key tenants such as Auric Pacific, Best Denki, Golden Village, BHG, and NTUC Enterprise. Today, it enjoys full occupancy rate. In 2017, Junction 8 was valued at S$ 735 million and has contributed S$ 42.1 million in NPI. Thus, it is the fifth largest source of income to CMT.
Combined, the 5 properties above had contributed S$ 285.4 million or 59.7% of CMT’s total NPI of S$ 478.2 million in 2017.
#3: The Financials
Over the last 10 years, CMT has grown its revenues and distributable income. Revenues have increased from S$ 510.9 million in 2008 to S$ 682.4 million in 2017. This, in turn, has resulted in growth in its distributable income from S$ 238.4 million in 2008 to S$ 395.8 million in 2017. CMT’s distribution per unit (DPU) had grown from 7.52 cents to 11.16 cents during the period.
Source: Annual Reports of CapitaLand Mall Trust
#4: Balance Sheet Strength
As at 31 March 2018, CMT has reported to have S$ 3.03 billion in unsecured borrowings. Its aggregate leverage is 33.5%, its average cost of debt is 3.2% & its average term to debt maturity for its debt is 5.2 years. CMT is reaffirmed the ‘A2’ rating by Moody’s Investors Service on 16 July 2015.
#5: Lease Expiry
Typically, CMT signs a 3-year lease terms with its retail tenants. Presently, its lease expiry is evenly spread out for the next 3 years: 28.1%, 30.7% and 25.6% in 2018, 2019, and 2020.
Source: Annual Report 2017 of CapitaLand Mall Trust
#6: Divestment of Sembawang Shopping Centre
On 19 April 2018, CMT has sold Sembawang Shopping Centre for S$ 248.0 million. Based on its latest valuation, this mall was valued at S$ 126 million. Hence, the disposal would bring a disposal gain of S$ 119.6 million to CMT.
Upon the disposal, CMT has reduced its portfolio from 16 assets to 15 assets presently.
#7: The Funan Redevelopment
On 1 July 2016, CMT has closed its Funan DigitaLife Mall for redevelopment. This project will add 388,000 sq. ft. of retail spaces, which would lift its retail space to 870,000 sq. ft. Presently, the mall has secured several anchor tenants such as:
- Wild Rice, Singapore’s leading professional theatre company, which will build an intimate 380-seat theatre that would occupy 18,000 sq. ft. of spaces at Funan.
- WeWork has leased 40,000 sq. ft. of office spaces at Level 4 at Funan’s North Office Block.
- Newstead Technologies, AddOn Systems, and T K Foto, which were tenants at Funan had confirmed their return to the new Funan mall once its redevelopment works are completed.
As I write, CMT is trading at S$ 2.03 a unit.
As at 31 March 2018, CMT has reported to have S$ 1.96 in net asset value a unit. Thus, its current P/NAV works out to be 1.04. It is presently on the low side of its 10-year range of 0.96 – 1.30.
CMT adopts a distribution policy to declare and pay out at least 90.0% of its distributable income on a quarterly basis. It has declared and paid 11.16 cents in DPU for 2017. If CMT maintains its DPU at 11.16 cents, hence, its expected gross dividend yield is 5.50%, much closer to its high end of its 5-year range of 4.73% – 5.90%.
Calculated based on Figures Presented in Annual Reports of CMT
#9: Investor Relations
For further enquiries or to request for additional investment information on CMT’s Investors Relation matters, you may contact:
Ms. Audrey Tan
Telephone: +65 6713 1507
#10: Major Shareholders
Temasek Holdings (Private) Limited remains as the sponsor and the largest unitholder of CapitaLand Mall Trust (CMT) with 29.57% unitholdings.
CMT has delivered stable distributions to its unitholders for the last 10 years. It has a portfolio 15 assets that have an occupancy rate of 98.9% with a tenant base of 2,900+ as at 31 March 2018. CMT expects to derive additional income from Funan once its redevelopment works are completed in Q4 2019. Hence, it laid itself a firm foundation to sustain distribution growth in the future.
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Thank you for the informative post. It seems that the vertical axis of the DPU chart is wrong? Also the current P/NAV does not look right.