5 Quick Things Investors Should Learn About Capitaland Mall Trust

Capitaland Mall Trust (SGX: C38U) belongs to a group of cool stocks in Singapore that shares webcasts and/or transcripts of their quarterly earnings presentations (the link for Capitaland Mall Trust is here).

Capitaland Mall Trust is a real estate investment trust or REIT.  Being an owner of a REIT’s units gives you partial ownership to all the real estate that it owns. In Capitaland Mall Trust’s case, it owns stakes in popular spots such as Raffles CityPlaza SingapuraBugis Junction, and more.

You can read more about Capitaland Mall Trust in here.

Fashionable results?  

Below are five useful things I learned from listening to a webcast of Capitaland Mall Trust’s fiscal second-quarter earnings:

  1. Wilson Tan, the chief executive of Capitaland Mall Trust’s manager, said that the REIT’s joint ventures – namely that of Raffles City and Westgate – both did well for the first-half of 2015. Net property income (NPI) for its joint ventures were up 6.7% year–on-year which was favorable compared to the REIT’s overall NPI decrease of 0.5% year-on-year.
  2. For Clarke Quay, Zouk, a popular night club brand in Singapore, will be taking up 31,000 square feet of the available 57,000 square feet of space that’s vacated by Lifebranz. Tan was optimistic of this move as it provides tenant diversity compared to the previous arrangement.
  3. The decision to rebrand JCube towards the younger crowd was in part due to the existence of a cinema and ice-skating rink at the mall. Tan said that internal analytics showed that the two features tended to draw a younger crowd and Capitaland Mall Trust looked to fit new tenants in the mall around this.
  4. Tan also took time to stress on what Capitaland Mall Trust stood for: An entity that can deliver a sustainable distribution per unit (DPU) over long periods of time. He cited the REIT’s decision to secure debt which stretches out up till 2027 as part of management’s efforts to take care of both the portfolio and the financing required to deliver a consistent DPU.
  5. Tan also explained how the management fee for Capitaland Mall Trust was structured. The REIT Manager’s fee structure, which has existed since 2002, consisted of a 0.25% base fee on deposited property value and a performance fee of 2.85% of gross revenue. Tan was happy with the revised regulatory proposal by the Monetary Authority of Singapore as it avoided intervening on the management fee structure; he felt that measures such as NPI-based fees could lead to REITs gaming the system.

Foolish takeaway

To buy and hold a REIT’s units or a company’s shares for the long term also means keeping up with developments in the entity.

The access to management teams via webcast and transcripts gives the Foolish investor a fair chance to judge for themselves whether they would like to be invested alongside those teams. It also helps us put together a more complete thesis around an investment and keep up with developments in its industry.

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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 Chin Hui Leong doesn’t own shares in any companies mentioned.