CAPITALAND MALL TRUST (SGX:C38U)
CapitaLand Mall Trust - Breaking Free
- 90% of CapitaLand Mall Trust's tenants allowed to resume operations as early as the first week of July.
- Suburban retail malls likely lead retail recovery.
- We estimate that c.52% of CapitaLand Mall Trust’s revenue originate from dominant malls.
- Target price pegged to 1.0x P/BV.
Upgrade to CapitaLand Mall Trust to BUY; Target Price revised to S$2.15.
- We upgrade our rating to BUY on CapitaLand Mall Trust (SGX:C38U) with a revised target price of S$2.15 as retail tenants will be given the green light to resume operations as early as the first week of July.
- CapitaLand Mall Trust is currently trading at a P/NAV of 0.9x, at -2 standard deviation (SD) levels. History shows that CapitaLand Mall Trust does not trade below book for long, and the current range represents an attractive risk-to-reward ratio.
- Our new target price implies a price-to-book of 1.0x and a target yield of 4.6% on our FY20 dividend estimates.
Where we differ: Portfolio malls will not recover at the same pace.
- We believe that dominant suburban malls will take the lead in shopper traffic recovery post Circuit Breaker. Dominant retail malls contributed c.52% of CapitaLand Mall Trust’s revenue in FY19, of which half was from suburban malls.
- While central retail malls continue to face moderately weak sentiments, the pace of recovery may surprise on the upside with demand from returning workers and pent-up demand from local shoppers. Additional government support and waivers from retail landlords will also help to accelerate the ramp-up process for the tenants most affected by the pandemic.
Vast majority of tenants allowed to reopen as early as first week of July.
- Approximately 90% of retail tenants within CapitaLand Mall Trust’s portfolio will be allowed to resume operations within phase 2 of post Circuit Breaker measures from the current c.30% of tenants. We estimate that half of these tenants (Food & Beverage and Beauty & Health) are from trade sectors that will see a sharp recovery.
- See CapitaLand Mall Trust Share Price; CapitaLand Mall Trust Target Price; CapitaLand Mall Trust Analyst Reports; CapitaLand Mall Trust Dividend History; CapitaLand Mall Trust Announcements; CapitaLand Mall Trust Latest News.
Singapore Retail REITs
- See sector update: Singapore Retail REITs - DBS Research 2020-05-29: Near The End Of A Storm.
- See also other Retail S-REITs:
- CapitaLand Mall Trust - DBS Research 2020-05-29: Breaking Free.
- Frasers Centrepoint Trust - DBS Research 2020-05-29: Suburban Giants To Lead Retail Recovery.
- Lendlease Global Commercial REIT - DBS Research 2020-05-06: Steering Steady Amidst The COVID Storm.
- Mapletree Commercial Trust - DBS Research 2020-05-29: The Flower That Blooms In Adversity.
- SPH REIT - DBS Research 2020-05-29: It Pays To Be Prudent
- Starhill Global REIT - DBS Research 2020-05-29: Slowly But Surely.
Singapore Research Team
DBS Group Research
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Derek TAN
DBS Research
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https://www.dbsvickers.com/
2020-05-29
SGX Stock
Analyst Report
2.15
UP
1.750
