- 2Q14/1H14 DPU rose 6.3%/5.4% YoY on AEI completions and positive rental reversion.
- New SGD18.5m AEI for Bukit Panjang Plaza announced with 8% targeted ROI; completion in 3Q16.
- Reiterate BUY with unchanged DDM-derived TP of SGD2.30.
CMT reported a 4.1% increase in 1H14 revenue to SGD164.7m, with DPU rising 5.4% YoY to 5.26 SGD cts. 1H14 revenue was boosted by IMM Building whose AEI was completed in Jun 2013, and a 6.6% positive rental reversion for leases renewed in 1H14. CMT still has about 6.4% of gross rental income up for renewal for the rest of the year. Like others, its all-in financing cost inched up to 3.6% in 2Q14 (1Q14: 3.5%) with debt maturity of 4.2 years (1Q14: 4 years). Portfolio occupancy remained strong at 98.6%, with Westgate making good progress, achieving a 94.7% occupancy (1Q14: 92%).
AEIs on track; latest announced for Bukit Panjang
The ongoing AEIs at Bugis Junction, Tampines Mall and IMM Building are progressing well. Over at JCube, the marketing of the mall’s new level 2 retail zone – called J.Avenue – saw two-thirds of the 70 shops being taken up. J.Avenue is targeted to open progressively from September. Separately, Bukit Panjang Plaza will soon be undergoing a two-year AEI, costing SGD18.5m, with a ROI of 8.0%. We like CMT for its disciplined and cost-conscious management team, and believe its ongoing AEIs will buffer downside risks in the event that property prices correct . CMT has consistently achieved positive rental reversions (2.3-13.5% pa) since 2003. Even during the global financial crisis period in 2009, CMT eked out a 2.3% uplift to be followed by a 6% average increase in the subsequentfour years. We expect this momentum to be sustained. Reiterate BUY with an unchanged DDM-derived TP of SGD2.30.
No comments:
Post a Comment