Four Facts CapitaMalls Asia’s Investors Need To Know

Ser Jing - CapitaMalls Asia to Acquire New Mall in China (pic) Shopping mall developer, owner, and manager CapitaMalls Asia (SGX: JS8), or “CMA”, recently released presentations slides that it had prepared for the Europe, Tokyo & North America Non-Deal Roadshows. The slides gave some great details about the company’s business model and its future plans.

Here are some of facts that CapitalMalls Asia’s investors should know.

1) CMA’s Business Structure

The company operates in five countries: Singapore; China; Malaysia; Japan; and India. It is majority owned by CapitaLand (SGX: C31), one of Asia’s largest real estate companies, and has substantial ownership stakes itself in both publicly-listed real estate investment trusts (REITs) and private equity funds that are involved with real estate investment.

The REITs include CapitaMall Trust (SGX: C38U), Capita Retail China Trust (SGX: AU8U) and CapitaMalls Malaysia Trust. As of 30 June 2013, CMA owns 27.6%, 20.7% and 36% of the REITs respectively.

The chart below showcases how CMA’s business is structured:

four facts abt capital mall

Source: CMA’s Europe, Tokyo & North America Non-Deal Roadshows Presentation Slides

2) CMA’s Presence Across the Real Estate Value Chain

According to CMA’s presentation, it has a presence across the retail-business value chain. The company has proven capabilities in sourcing for land bank and investment opportunities and the ability and experience in developing a variety of malls that caters to a diverse mix of tenants and customers.

In addition, it has a proven track record of managing malls and enhancing their value through asset enhancement initiatives and the ability to deploy and manage capital efficiently through its experience in creating and managing REITs and private funds.

3) CMA’s Debt Management

The company aims to reduce refinancing risks by “capping annual debt maturity at 10% [of its Net Asset Value].”

With a total debt load of S$2.5b and carrying cash on hand worth only S$817m as of 30 June 2013, CMA might face significant risks if repayment of a huge portion of its loans were squeezed into a narrow frame of time. Credit markets might worsen (as it did during the Great Financial Crisis of 2007-2009) without warning just when it needs to obtain fresh funds to repay its loans.

With its debt maturity spread out somewhat evenly, such risks are reduced.

4) CMA’s Pipeline of Malls

Over the next three years and more, CMA is looking to increase the number of properties in its portfolio by a quarter.

Country Operational Properties Targeted opening in 2013 Targeted opening in 2014 Targeted opening in 2015 and beyond Total
Singapore 17 2 19
China 51 2 8 61
Malaysia 5 1 6
Japan 8 8
India 2 1 2 4 9
Total 83 3 4 13 103
*Figures as of 15 Jul 2013

Source: CMA’s Europe, Tokyo & North America Non-Deal Roadshows Presentation Slides

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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.