Distributions At CapitaMall Trust Gets Bigger

Ser Jing - Shopping for CapitaMall Trust's First Quarter Results (picture)Singapore’s oldest Real Estate Investment Trust CapitaMall Trust (SGX: C38U), which specialises in retail malls here in the republic, posted a 12.2% year-on-year increase in quarterly net property income to $125m.

Meanwhile, the REIT, which is managed by retail mall developer CapitaMalls Asia (SGX: JS8) and also has links to real estate company CapitaLand (SGX: C31), saw its gross revenue for the quarter move up 10.4% to $183m.

Asset enhancement initiatives that were completed last year on its Bugis+ and Atrium malls helped account for the bulk of the top-line increase. Increases in rent – also known as positive rental reversions – in most of the REIT’s other malls explained the rest of the gross revenue growth.

REITs investors invariably focus on distributions, and on that front CMT did not disappoint. Its quarterly distributable income was 10.2% higher at $87.7m compared to a year ago. That translates into a 6.3% year-on-year increase in distributions per unit (DPU) for the quarter to 2.53 cents.

Moving on to CMTs balance sheet, its gearing ratio now stands at 34.9%, down by 2.6 percentage points from last year. All of the REIT’s wholly-owned properties are now unencumbered – meaning those properties aren’t being used as collateral in any form for CMT’s various loans.

The REIT’s total property portfolio is now valued at $8.32b, up by 3.2% from a year ago. Due to the increase in its portfolio’s value as well as a decrease in liabilities, the Net Asset Value (NAV) of CMT’s units have grown by 3.7% year-on-year to $1.68.

Moving forward, CMT sees positive retail-related data coming from the Ministry of Trade and Industry as well as the Singapore Department of Statistics.

The REIT will remain focused on managing the 380 leases that are due for renewal for the rest of 2013, as well as getting tenants into Westgate which is pencilled for an opening by the end of this year. Unit holders can also look forward to the completion of Bugis Junction’s asset enhancements by the third quarter next year. Meanwhile, the IMM Building is under consideration for further expansion.

CMT’s units are selling for $2.03 apiece at the time of writing, carrying a Price-to-Book value of 1.2 and an annualised distribution yield of 5% based on the DPU for the reporting-quarter.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chong Ser Jing doesn’t own shares in any companies mentioned.