CapitaLand Mall Trust - Maybank Kim Eng 2020-09-06: Merger Moves Ahead

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

CapitaLand Mall Trust - Merger Moves Ahead


EGM date set, deal sweetened

  • CapitaLand Mall Trust (SGX:C38U) is proceeding with its planned merger with CapitaLand Commercial Trust (SGX:C61U) and its EGM is now fixed for 29 Sep 2020.
  • A higher DPU accretion for both unitholders, due to waiver of CapitaLand Mall Trust’s acquisition fee, has sweetened the deal.
  • Scale benefits from the merger are unchanged, while a more diversified AUM and higher development headroom adds growth options, to support its portfolio remodelling over the medium term.
  • Sector fundamentals are improving, and valuations remain undemanding at 6.3% FY21 dividend yield and 0.96x PB, with catalyst from better-than-expected tenant sales post-lockdown.
  • Maintain BUY on CapitaLand Mall Trust and DDM-based Target Price of SGD2.35 (COE: 6.3%, LTG: 1.5%).



Acquisition fee waived, better deal accretion



Merger merits unchanged

  • The deal rationale remains unchanged; the exercise aims to create the largest S-REIT and second-largest commercial APAC REIT with a SGD12.7b market cap, ahead of Ascendas REIT (SGX:A17U) at SGD11.5b, and backed by a SGD22.4b AUM (96% in Singapore, 4% in Frankfurt, Germany).
  • Management expects the new CapitaLand Integrated Commercial Trust to embark on more sizeable mixed-used acquisitions/ redevelopments in Singapore and other developed markets, given its higher SGD5.8b development headroom.

Larger malls leading recovery






Chua Su Tye Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2020-09-06
SGX Stock Analyst Report BUY MAINTAIN BUY 2.350 SAME 2.350



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