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DPU at CapitMall Trust Surges 9% for 2013

Ser Jing - Shopping for CapitaMall Trust's First Quarter Results (picture)Our sunny island’s first & largest real estate investment trust (REIT), CapitaMall Trust (SGX: C38U), or CMT, released its fourth quarter of 2013 (4Q 2013) and the full year of 2013 (FY 2013) results on Wednesday.

For the quarter, gross revenue increased 7% to S$186 million, net property income rose 11% to S$125 million and distribution per unit (DPU) went up 15% to 2.72 Singapore cents, all year-on-year. For FY 2013, gross revenue increased 10% to S$729 million, net property income (NPI) rose 13% to S$502 million and DPU went up 9% to 10.27 Singapore cents, as compared to FY 2012.

CMT’s portfolio consists of 16 shopping malls located in the suburban areas and downtown core of Singapore, such as Tampines Mall, Junction 8, Funan DigitaLife Mall, Plaza Singapura and Bugis Junction. The full list of the assets in its portfolio can be found here.

The increase in gross revenue of 10% in FY 2013 was due to “higher rental income from JCube, Bugis+ and The Atrium@Orchard after completion of their respective asset enhancement initiatives (AEI)”. However, this was slightly offset by “lower contribution from Bugis Junction due to AEI”. Phase 1 of the AEI at Bugis Junction has been completed but Phase 2 will start in 1Q 2014 and will be completed by 3Q 2014.

NPI rise of 13% for the year was attributed to “higher NPI from JCube, Bugis+ and The Atrium@Orchard after completion of their respective AEI” but was “offset by lower NPI from Bugis Junction due to AEI and operating expenses from Westgate (including opening expenses)”.

As of the end of last year, CMT’s average cost of debt and gearing ratio were at 3.4% and 35.3% respectively. Average term to maturity of the debt is at 3.6 years. Net asset value was at S$1.74. The portfolio has an occupancy rate of 98.5%.

To put things into perspective, Frasers Centrepoint Trust (SGX: J69U), which released its earnings on Tuesday, has an average cost of debt of 2.7% and a gearing ratio of 29.7%. Mapletree Commercial Trust (SGX: N2IU), which owns Vivocity, among others, spots an average cost of debt of 2.2% and a gearing ratio of 40.8%. It released its earnings on the same day as CMT.

Mr Wilson Tan, Chief Executive Officer of the manager of CMT, said, “For FY 2013, our tenants’ sales per square foot increased 2.5% and shopper traffic grew 3.1% year-on-year. During the fourth quarter, we completed Phase 1 of Bugis Junction’s asset enhancement works and opened Westgate shopping mall. Westgate started operations on 2 December 2013, with a committed occupancy of about 90.0% as at 31 December 2013. We are also happy to report that we have granted options to a consortium to purchase Westgate Tower. The consortium has up to 24 January 2014 to exercise the options. This year, we will embark on the asset enhancement works for Tampines Mall and Phase 2 of Bugis Junction, to further create sustainable value for our unitholders.”

CMT closed at S$1.89 on Wednesday. The historical PB ratio is at 1.1 and the distribution yield is at 5.4%.

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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 Sudhan P doesn’t own shares in any companies mentioned.