CapitaLand Mall Trust reports 3Q19 net property income jumped 18 percent, beating Daiwa forecast

The interior of CapitaLand and CapitaLand Mall Trust's Funan mall in Singapore, which reopened in June 2019 after a three-year redevelopment. Credit: CapitaLand Mall TrustThe interior of CapitaLand and CapitaLand Mall Trust's Funan mall in Singapore, which reopened in June 2019 after a three-year redevelopment. Credit: CapitaLand Mall Trust

CapitaLand Mall Trust reported Monday its third quarter net property income rose 17.6 percent on-year to S$144.22 million due to the first full-quarter contribution from Funan mall and the contribution from all of Westgate mall. The results beat forecasts from Daiwa.

The trust acquired the remaining 70 percent of Westgate it didn’t already own in the fourth quarter of last year, and Funan mall opened in late June, the filing said.

Gross revenue for the quarter ended 30 September was S$201.11 million, up 17.9 percent on-year, the trust said in a filing to SGX.

The distribution per unit (DPU) was 3.06 Singapore cents, up 4.8 percent from 2.92 Singapore cents in the year-ago period, the filing said.

Daiwa had forecast third quarter net property income of S$135.3 million on revenue of S$192 million, with a DPU of 3.02 Singapore cents.

Westgate and Funan contributed S$18.8 million and S$12.5 million in revenue respectively in the quarter, while Lot One Shoppers’ Mall had lower income due to renovation works which began during the period, the filing said.

Based on CapitaLand Mall Trust’s closing unit price of S$2.65 on Monday, the annualized distribution yield for the third quarter was 4.58 percent, the filing said.

Tony Tan, CEO of CapitaLand Mall Trust Management Limited (CMTML), the trust’s manager, called the results “resilient,” and added that the Lot One Shoppers’ Mall is also undergoing renovation to offer more entertainment options, including a larger library and a reformatted cinema.

But he pointed to challenges ahead.

“The opening of three major malls this year, including Funan, has intensified the competition for consumer dollars. We will leverage CapitaLand’s lifestyle and rewards programs — CapitaStar, CapitaVoucher and CapitaCard — and work closely with our tenants to drive retail sales at our malls,” Tan said in the statement. “For CMT to continue to deliver sustainable returns to unitholders, we will be looking out for value creation and portfolio reconstitution opportunities.”

The portfolio occupancy rate was at 98.9 percent at end-September, the filing said.

While the trust pointed in its outlook to slowing economic growth in Singapore and a declining retail sales index, it added that it has a strong portfolio of 15 quality shopping malls in the city-state with strategic locations.

For the nine-month period, CapitaLand Mall Trust reported net property income rose 13.1 percent on-year to S$417.47 million on gross revenue of S$583.37 million. The DPU for the January-to-September period was 8.86 Singapore cents, up 4.1 percent from 8.51 Singapore cents in the year-ago period, the trust said.

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