CapitaMall Trust registered a 12.2 per cent y-o-y NPI growth in 2Q13, driven by AEIs and a 6.4 per cent portfolio rental reversion. While AEIs and mall completions will continue to drive its NPIs, the marginal increase in asset values on a decline of 15 to 25 basis points in cap rates seen in Q2 2013 points to a more moderate rental outlook, in our view.
Q2 2013 DPU was in line at 24 per cent of our and consensus full-year estimates. H1 2013 DPU formed 48 per cent of our full-year. We keep our estimates and maintain our dividend discount model-based target price (7.2 per cent discount rate).
Maintain "neutral" on valuations with the stock at a compressed FY 2014 yield of 5.3 per cent and price to book value of 1.2 times. Positive surprises from AEIs and accretive acquisitions form the rerating catalysts.
NEUTRAL
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