CORRECTION: CapitaLand Mall Trust 4Q18 net property income rises, beating some forecasts

CapitaLand Mall Trust building in Singapore’s Bugis neighborhood.CapitaLand Mall Trust building in Singapore’s Bugis neighborhood.

CapitaLand Mall Trust reported on Wednesday that its net property income for the fourth quarter rose 4.3 percent on-year to S$124.43 million after the acquisition of the remaining 70 percent of Westgate mall it didn’t already own. That beat forecasts from Daiwa.

Higher gross rental income from IMM Building and Bedok Mall also boosted results, but that was partly offset by lower gross revenue from Sembawang Shopping Centre, which was sold in June, and lower occupancy at JCube, Lot One Shoppers’ Mall and Clarke Quay, it said.

Gross revenue for the quarter ended 31 December increased 4.7 percent on-year to S$180.46 million, it said in a filing to SGX before the market open on Wednesday.

The distribution per unit (DPU) was 2.99 Singapore cents for the quarter, including an advanced DPU of 1.43 Singapore cents for the 1 October to 7 November period, which was paid before the issue on 8 November of new units in a private placement to raise funds for the Westgate mall acquisition.

That was up 3.1 percent from a DPU of 2.90 Singapore cents in the year-ago quarter, the filing said.

Daiwa had forecast fourth quarter net property income would fall 1.0 percent on-year to S$118.0 million on revenue of S$169.1 million, down 1.9 percent on-year; it had projected DPU of 2.90 Singapore cents for the quarter, flat on-year.

For the full year, CMT reported net property income rose 3.2 percent on-year to S$493.55 million on gross revenue of S$697.52 million, up 2.2 percent on-year. DPU for the full year was 11.50 Singapore cents, up 3.0 percent from 11.16 Singapore cents in the previous fiscal year.

That was due to the acquisition of Westgate, as well as higher gross rental income from Plaza Singapura, IMM, Tampines Mall, Junction 8 and Bedok Mall, partially offset by lower revenue from Sembawang Shopping Centre on its divestment, and lower occupancy for JCube and Bukit Panjang Plaza, the trust said.

For the full year, JPMorgan had forecast net property income of S$511 million on revenue of S$736 million, with full-year DPU of S$0.113.

CapitaLand Mall Trust’s portfolio had 15 shopping malls, in the suburban and downtown core areas of Singapore; it also owns 122.7 million units in CapitaLand Retail China Trust.

In the outlook, Richard R. Magnus, chairman of CapitaLand Mall Trust Management, CMT’s manager, said the results showed resilience pointed to some caution ahead.

“Cognisant of the challenges ahead — which include slowdown in the global and Singapore economies, uncertainty in the interest rate environment and competition from the completion of new shopping malls – we remain vigilant and will continually explore new ways to differentiate our malls from the competition and increase customer engagement,” Magnus said in the statement.

The REIT also pointed to the Funan mall, currently undergoing redevelopment, which is on track to open in the second quarter, noting that including leases under active negotiation, it is more than 80 percent taken.

This article was originally published on Wednesday, 23 January 2019 at 7:28 A.M. SGT; it has been corrected to reflect that results beat forecasts from Daiwa.

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