CapitaMall Trust’s (CMT) 3QFY12 results exceeded our expectations. NPI was up 4.0% to S$332.3m whereas DPU was up 0.4% to 7.10 S cents. This forms 77.6% and 76.1% of full-year NPI and DPU projections respectively. CMT’s occupancy remained largely stable at 98.4% (98.6% in 2Q), despite a 4.6ppt drop QoQ at IMM building as a result of repositioning of the mall. For YTD, 6.1% positive rental reversions were achieved, largely unchanged from 6.4% seen in 1H. Looking ahead, we believe CMT is likely to sustain its growth profile, given the smooth execution of its AEIs and strong leasing activities. The development of Westgate, of which CMT has 30% stake, is also expected to start contributing to its income by end-2013. We now revise our assumptions to incorporate the better-than-expected results and rental uplift resulting from its AEIs. Rolling our valuations to FY13, our fair value is raised from S$2.04 to S$2.38. Upgrade CMT to BUY from Hold as we see an attractive upside potential.
3QFY12 results above expectations
CapitaMall Trust’s (CMT) 3QFY12 results exceeded our expectations. NPI and distributable income grew by 4.3% and 4.6% YoY to S$112.1m and S$80.9m respectively, mainly due to contributions from JCube which commenced operations in Apr and Bugis+ which became fully operational in Aug. While DPU was flat YoY at 2.42 S cents, we note that it was partially due to the retention of S$5.9m capital distribution as opposed to a release of S$6.2m in prior year. For 9MFY12, NPI was up 4.0% to S$332.3m whereas DPU was up 0.4% to 7.10 S cents. This forms 77.6% and 76.1% of full-year NPI and DPU projections respectively.
Portfolio operating performance remains robust
CMT’s occupancy remained largely stable at 98.4% (98.6% in 2Q), despite a 4.6ppt drop QoQ at IMM building as a result of repositioning of the mall. This was mainly helped by stronger take-up rates at Bugis+ (98.5% vs. 97% in 2Q) and The Atrium@Orchard. According to management, over 90% of the total space at the latter was committed, with the retail space on track to open in early Nov. CMT also updated that the asset enhancement initiative (AEI) for Block C of Clarke Quay was completed and retail spaces there were fully operational. For YTD, 6.1% positive rental reversions were achieved, largely unchanged from 6.4% seen in 1H.
Post AEI contributions to sustain growth
Looking ahead, we believe CMT is likely to sustain its growth profile, given the smooth execution of its AEIs and strong leasing activities. The development of Westgate, of which CMT has 30% stake, is also expected to start contributing to its income by end-2013. We now revise our assumptions to incorporate the better-than-expected results and rental uplift resulting from its AEIs. Rolling our valuations to FY13, our fair value is raised from S$2.04 to S$2.38. We upgrade CMT to BUY from Hold as we see an attractive upside potential. As a note, CMT has also secured sufficient capital to fully refinance its debt due in Oct. Gearing stands at 37.6%, still healthy in our view.
CapitaMall Trust’s (CMT) 3QFY12 results exceeded our expectations. NPI and distributable income grew by 4.3% and 4.6% YoY to S$112.1m and S$80.9m respectively, mainly due to contributions from JCube which commenced operations in Apr and Bugis+ which became fully operational in Aug. While DPU was flat YoY at 2.42 S cents, we note that it was partially due to the retention of S$5.9m capital distribution as opposed to a release of S$6.2m in prior year. For 9MFY12, NPI was up 4.0% to S$332.3m whereas DPU was up 0.4% to 7.10 S cents. This forms 77.6% and 76.1% of full-year NPI and DPU projections respectively.
Portfolio operating performance remains robust
CMT’s occupancy remained largely stable at 98.4% (98.6% in 2Q), despite a 4.6ppt drop QoQ at IMM building as a result of repositioning of the mall. This was mainly helped by stronger take-up rates at Bugis+ (98.5% vs. 97% in 2Q) and The Atrium@Orchard. According to management, over 90% of the total space at the latter was committed, with the retail space on track to open in early Nov. CMT also updated that the asset enhancement initiative (AEI) for Block C of Clarke Quay was completed and retail spaces there were fully operational. For YTD, 6.1% positive rental reversions were achieved, largely unchanged from 6.4% seen in 1H.
Post AEI contributions to sustain growth
Looking ahead, we believe CMT is likely to sustain its growth profile, given the smooth execution of its AEIs and strong leasing activities. The development of Westgate, of which CMT has 30% stake, is also expected to start contributing to its income by end-2013. We now revise our assumptions to incorporate the better-than-expected results and rental uplift resulting from its AEIs. Rolling our valuations to FY13, our fair value is raised from S$2.04 to S$2.38. We upgrade CMT to BUY from Hold as we see an attractive upside potential. As a note, CMT has also secured sufficient capital to fully refinance its debt due in Oct. Gearing stands at 37.6%, still healthy in our view.
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