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What Investors Should Know About CapitaLand Mall Trust’s Latest Earnings and Valuation

CapitaLand Mall Trust (SGX: C38U) is Singapore’s oldest real estate investment trust. It invests in retail properties in Singapore, and currently has 16 properties that are located in the suburban areas and downtown core of our Garden City.

Some examples of the properties owned by the REIT are Tampines Mall, Junction 8, IMM Building, Plaza Singapura, and Bugis Junction.

There are two things about CapitaLand Mall Trust that investors may want to know about right now: Its latest financial performance and valuation.

Financial performance

Here’s a table showing important items from CapitaLand Mall Trust’s income statement for the second quarters of 2017 and 2016:


Source: CapitaLand Mall Trust 2017 second quarter earnings press release

We can see that CapitaLand Mall Trust turned in a flat performance in the second quarter of 2017 as its net property income and distribution per unit grew only slightly compared to a year ago.

The REIT achieved an occupancy rate of 98.6% for the reporting quarter, which is higher than a year ago (97.9%), and also better than the average market occupancy level, according to management.

CapitaLand Mall Trust also managed to improve its balance sheet as its aggregate leverage declined from 35.3% in the second quarter of 2016 to 34.7%.

Valuation

There are two useful valuation metrics for assessing REITs. They are the price-to-book (PB) ratio, and the distribution yield.

The table below shows CapitaLand Mall Trust’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 38 REITs that are in Singapore’s stock market.


Source: SGX Sock Facts; data as of 10 October 2017

We can see that CapitaLand Mall Trust is trading at a premium to the market average given its higher PB ratio and lower distribution yield.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned. The Motley Fool Singapore has a recommendation for CapitaLand Mall Trust.