CapitaLand Mall Trust 3Q net property income up slightly, beating analyst forecast

CapitaLand Integrated Commercial Trust building in Singapore’s Bugis neighborhood.CapitaLand Integrated Commercial Trust building in Singapore’s Bugis neighborhood.

CapitaLand Mall Trust reported on Thursday that its third quarter net property income rose 1.1 percent on-year to S$122.68 million, beating an analyst’s forecast.

Gross revenue for the quarter ended 30 September increased 0.7 percent on-year to S$170.53 million, the REIT’s manager, CapitaLand Mall Trust Management (CMTML), said in a filing to SGX before the market open on Thursday.

Junction 8, IMM Building, Plaza Singapura, Bedok Mall and Tampines Mall saw higher gross revenue, partly offset by lower gross revenue from Sembawang Shopping Centre, which was divested in mid-June, and lower occupancy and rental rates contracted on new and renewed leases from JCube and Bukit Panjang Plaza, CMTML said.

Distributable income to unitholders was up 4.9 percent on-year at S$103.54 million, CapitaLand Mall Trust’s manager said.

The distribution per unit (DPU) rose 5.0 percent on-year to 2.92 Singapore cents, from 2.78 Singapore cents in the year-ago period, it said. The DPU will be paid on 30 November, it said.

Daiwa had forecast net property income of S$117.2 million, revenue of S$166.8 million and DPU of 2.86 Singapore cents.

“CMT continued to deliver stable returns in the third quarter of 2018 despite uncertain market conditions,” Tony Tan, CEO of CMTML, said in a statement. He noted that portfolio occupancy as of 30 September was 98.5 percent, compared with government data showing market occupancy of 92.7 percent.

“Asset enhancement initiatives to uplift the shopping experience at Tampines Mall and Westgate are on track to complete in the fourth quarter of 2018,” he said, adding that CMT was also set to acquire the remaining 30 percent interest in Westgate it didn’t already own. Funan, which is still under re-development, was set to open ahead of schedule in the second quarter of next year, with income contributions from the second half of 2019, he said, adding committed occupancy for the retail and office components were at around 70 percent and 60 percent respectively.

Finance costs for the quarter fell 13.4 percent on-year to S$22.7 million, mainly on the refinancing of a US$400.0 million note in March 2018 at lower interest rates through loan drawdowns, it said. The loans were partially repaid with net proceeds from divesting Sembawang Shopping Centre in June and medium-term note issuances at lower interest rates in the nine-month period, it said.

For the nine-month period, net property income rose 2.8 percent on-year to S$369.12 million, while gross revenue increased 1.4 percent on-year to S$517.06 million, CMT’s manager said.

The DPU for the nine-month period was up 3.0 percent on-year at 11.38 Singapore cents from 11.04 Singapore cents in the year-ago period, it said.

CMT owns 15 shopping malls in Singapore: Tampines Mall, Junction 8, Funan, IMM Building, Plaza Singapura, Bugis Junction, JCube, a 40 percent interest in Raffles City Singapore, Lot One Shoppers’ Mall, 90 of 91 strata lots in Bukit Panjang Plaza, The Atrium@Orchard, Clarke Quay, Bugis+, 30 percent interest in Westgate and Bedok Mall. It also holds 122.7 million units in CapitaLand Retail China Trust.

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