What Investors Need to Know About CapitaMall Trust’s Latest Earnings

Completion of the first two phases of refurbishments at Bugis Junction and higher rental achieved on new and renewed leases helped to boost CapitaMall Trust’s (SGX: C38U) third quarter gross revenue. This was announced after market close on Friday

CapitaMall Trust is part of CapitaLand Limited (SGX: C31) and also owns units in CapitaRetail China Trust (SGX: AU8U), the first real estate investment trust (REIT) listed here which owns retail malls in China.

For the quarter ended 30 September 2014, CapitaMall Trust’s gross revenue came in 2.9% higher year-on-yearS$164.6 million. Meanwhile, net property income was at S$114.1 million, a rise of 3.3% from a year ago.

Given the gains above, the REIT’s distribution per unit (DPU) managed to grow by 6.2% year-on-year to 2.72 Singapore cents. A DPU of 2.56 Singapore cents was achieved in the corresponding period a year ago. After taking into account CapitaMall Trust’s latest DPU, the REIT now has an annualised distribution yield of 5.6% based on its closing price of S$1.915 on Friday.

As of 30 September 2014, CapitaMall Trust’s gearing ratio was at 34.1%, almost unchanged from the end of June this year. The REIT’s adjusted net asset value per unit (after accounting for its distributable income) grew from S$1.71 as of 31 Dec 2013 to S$1.76.

Operationally, CapitaMall Trust’s portfolio, which consists of 16 shopping malls located in the suburban areas and downtown core of Singapore, had a high occupancy rate of 98.5%.

From 1 January 2014 to 30 September 2014, the REIT had renewed 417 leases and experienced a 6.3% increase in rent over preceding rental rates which are typically contracted three years ago. How, during the same period, shopper traffic declined by 1.5% compared to a year ago while tenants’ sales per square foot went down by 3.0%.

Mr Wilson Tan, Chief Executive Officer of the manager of the REIT, gave an update about some of the malls in the trust’s portfolio. He said:

“Asset enhancement works for Bukit Panjang Plaza, Tampines Mall and IMM Building are progressing smoothly. At JCube, all the 70 retail units at J.Avenue are fully committed. We have also completed the asset enhancement initiative at Bugis Junction. The mall added more specialty stores, including popular local and foreign brands such as Nike, Challenger, Muji, Skechers, Miam Miam and Billabong. Bugis Junction now boasts an even wider selection of merchandise and an enhanced shopping experience. In addition, Westgate Tower obtained the temporary occupation permit on 9 October 2014.”

Going forward, CapitaMall Trust is looking into opportunistic acquisition of properties and greenfield development projects. The REIT is currently trading at 1.07 times its latest book value.

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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.