3 Must Read Quotes from CapitaLand Mall Trust’s Management

CapitaLand Mall Trust (SGX: C38U) held its 2016 second-quarter earnings briefing recently.

There were a number of topics covered during the briefing and three quotes caught my eye. The quotes give insight to the REIT manager’s thought processes and what the real estate investment trust (REIT) is about. So, here goes!

1. What about the “others”?

Smaller malls like JCube and Sembawang Shopping Centre are housed under the label “others” at the REIT. Given the classification, a question was raised by an analyst on whether these malls may be considered for future divestment.

Wilson Tan, the chief executive of CapitaLand Mall Trust’s manager, responded with this quote:

“We are not in the business of trading of assets, and that is something I want to be very, very upfront with all investors. We are into assets that are income producing.”

In two sentences, Tan laid out how CapitaLand Mall Trust thinks about its current portfolio of properties.

2. The future of retail

The redevelopment of Funan DigitaLife Mall was also another topic of great interest. One analyst was looking for a reference point. Will it be like an integrated development such as Raffles City Singapore (RCS)? Or would CapitaLand Mall Trust be more interested in the retail portion alone, like Westgate?

Tan said:

“It’s not going to be like RCS. It’s not going to be like Westgate. It’s going to be very, very different.”

To delve more into the topic, Tan shared this thought:

“Why did Steve Jobs think that the iPhone will work?”

Here, Tan implied that the iPhone created a new whole experience in mobile computing. Tan said that while CapitaLand Mall Trust is not Steve Jobs, the REIT is striving to define a whole new experience for shoppers with the redevelopment, just like the iPhone.

3. The mothership

The Funan DigitaLife Mall redevelopment features three distinct components: retail, office, and serviced residences. CapitaLand Mall Trust’s management was asked on whether the other parts of CapitaLand Limited (SGX: C31) –  CapitaLand Mall Trust’s parent – will be engaged for redevelopment.

Tan said:

“I think it is important to recognise that CapitaLand has various components to the business itself. And it is important that we continue to leverage off the CapitaLand mothership.”

At the moment, the REIT is working on its own for this redevelopment. But Tan did not close the door to working with the other components of CapitaLand. An example could be Ascott Residence Trust (SGX: A68U), which operates serviced apartments and is part of the CapitaLand family.

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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.