CapitaLand Mall Trust (SGX: C38U), or CMT, is a real estate investment trust (REIT) that focuses on investing in income-producing retail-focused real estate. It currently has 15 properties, which are located in the suburban areas and downtown core of Singapore. Example of its properties includes Tampines Mall, Junction 8, Funan, IMM Building, Plaza Singapura, Bugis Junction, and others.
These are two things to know about the REIT right now: its latest financial performance and valuation.
Here is a table showing important items from CMT’s financial performance for the first quarter of the financial year ending 31 December 2019 (FY19).
Source: CMT Results Presentation
The above is a table from CMT latest earnings update.
Overall, all metrics improved on a year-on-year basis. The strong performance was due to new acquisitions, as well as higher revenue in Bedok Mall and Tampines Mall.
Mr Tony Tan, Chief Executive Officer of the Manager, said:
“We are pleased to start the year with a set of stable results in Q1 2019. This is largely attributable to the 100% contribution from Westgate to CMT’s revenue, following the completion of our acquisition of the balance 70.0% interest in Westgate last November. We expect Funan, opening in mid-2019 and about 90% leased, to contribute progressively to CMT’s earnings from 2H 2019.”
As of 31 March 2019, the REIT’s gearing and committed occupancy rate stood at 34.4% and 98.8%, respectively.
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 CMT’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 40 REITs that are in Singapore’s stock market.
Source: Yahoo Finance, OCBC Weekly S-REITs Tracker
We can see that CMT’s valuation is at a premium to the market average due to its low distribution yield. Similarly, its PB ratio is higher than that of the market average.
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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 Lawrence Nga doesn’t own shares in any companies mentioned. Motley Fool has recommended the shares of CapitaLand Mall Trust.