CapitaLand Mall Trust - RHB Invest 2019-04-25: 1Q19 DPU Of SGD0.029, +3.6% Y-o-y.

CAPITALAND MALL TRUST (SGX:C38U) | SGinvestors.io CAPITALAND MALL TRUST (SGX:C38U)

CapitaLand Mall Trust - 1Q19 DPU Of SGD0.029, +3.6% Y-o-y.

  • CAPITALAND MALL TRUST (SGX:C38U) posted a 1Q19 DPU of SGD0.029, +3.6% y-o-y.
  • The results were in line, with DPU accounting for 24% of our full-year forecast.
  • Gross revenue and NPI for the quarter rose 10%/12% y-o-y largely driven by the acquisition of Westgate and higher income from Tampines Mall and Bedok Mall.
  • Operating expenses also came in slightly lower due to lower land rent, marketing and utilities expenses, partially offset by higher maintenance expenses.



COMMENTS


  • Despite the challenging retail market, CapitaLand Mall Trust managed to eke out a positive rental reversion of 1.2% for the quarter – this has to be credited to the management’s active repositioning efforts. Key factors to watch out for include the potential impact of shopper traffic on its portfolio malls from the expected opening of ‘The Jewel’ and ‘Paya Lebar Quarter mall’ in 2019. With higher retail supply this year coupled with fast changing consumer trends, we expect rental reversion to stay flattish.
  • Overall portfolio occupancy however saw a slight dip of 0.4ppts q-o-q to 98.8% mainly on lower occupancies at Clarke Quay, IMM building and Bugis Junction. Management previously noted that it would aim to strike the right balance between occupancy and asking rents with the former given more importance.
  • While shopper traffic for the year increased by 2% y-o-y, tenant sales dipped slightly by 0.4% y-o-y, a reversal of the trend seen last year.
  • Funan is on track to be opened by mid-2019 with 90% of space leased and will contribute progressively from 2H19.
  • Separately, management is looking at various options for the JCube mall, including repositioning, redevelopment or divestment. Asset enhancement option for Lot one mall is also being looked at.
  • Valuations are fair in our view with the shares trading at 1.2x P/BV and offering dividend yields of 5%.
  • NEUTRAL, Target Price: SGD2.20.





Singapore Research RHB Securities Research | https://www.rhbinvest.com.sg/ 2019-04-25
SGX Stock Analyst Report NEUTRAL MAINTAIN NEUTRAL 2.200 SAME 2.200



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