CapitaMall Trust

[NTL]

The second trouble will be in 2085-2095 when they have to renew their leases.

You are a rare valuebuddy who looks out to what happens to your investment 70 to 80 years ahead, ie at age 90+ to 100+ and I really admire the foresightedness.

I actually feel that it is impossible to look so far ahead. Who is to say shopping mall retailing will continue for another 20 years or be replaced with on-line shopping with better computing technology (e.g. virtual reality, etc)?

Instead of looking so far ahead, why not just looking at "near" future, say 20yrs. Will the properties still be around? If so, will the current yield be sustainable for the 20yrs? If so, then you will likely get back your capital, and the units own will be "free" at whatever price then. So... Why not?

(Above argument came from buying leasehold properties that can be rent out at 5% net yield.)

[swakoo]

Not sure about US reits, but one possible reason yields are low is because their properties are freehold while ours is predominantly leasehold

CY09, true though this shouldn't account for such a big yield premium difference.

For China the property market is different, the govt gives land mainly on 30 to 60 year tenure, therefore how valuers do their valuation there will be different from how valuations are done in Sg and this in turn will affect the ltv ratio. To sum up,my comment on the 40 year issue is strictly for Singapore

Noted... Singapore industrial reits land tenures are mostly well below 40 years.

For the comparison of fcpt and cmt distribution, I used both companies latest full year and fcpt was 100% distribution while cmt was about 90%. So my statement still stands

While both reits do retain some quarters, they are both committed to 100% distribution. For the most recent 4 quarters, CMT's dpu is 10.84c while FCT's is 11.44c.

[CY09]

Hi all,

A very detailed analysis on CMT has been written by a blogger.

http://sreitsysteminvestor.blogspot.sg/2...lysis.html

What I have discussed on tenures and the issue on cap rate is discussed in point A. What is only lacking is how much CMT retains; CMT has never distributed 100% of its amount available for distribution over the past 3 years, preferring to keep some for general working and future purposed. It shows prudent management.

It is interesting to learn that CMT's cap rate is higher than FCPT, not sure if it is a mistake by the author or otherwise. Tampines Mall and CauseWay point are near direct comparable, yet the former's Cap rate is higher than the latter's.

[swakoo]

While both reits do retain some quarters, they are both committed to 100% distribution. For the most recent 4 quarters, CMT's dpu is 10.84c while FCT's is 11.44c.

Need to qualify that CMT has excluded it's dividend from CRCT from distributable income from FY2012 onwards. This piece is roughly 0.33c annualised. If we add this to the dpu for most recent 4 quarters, it's 11.17c vs 11.44c.

[kayhian]

SINGAPORE - Mainboard-listed CapitaMall Trust (CMT) said on Tuesday that its distribution per unit (DPU) for the first quarter ended March 31, 2015, rose 4.3 per cent to 2.68 cents from 2.57 cents a year ago.

The retail mall Reit said revenue increased 1.6 per cent to $167.4 million while net property income was up 3 per cent at $117.7 million.

Distributable income for 1Q 2015 was $92.9 million, a 4.2 per cent increase over $89.1 million a year ago.

Net asset value rose to $1.83 at March 31 from $1.81 at Dec 31, 2014.

- See more at: http://www.straitstimes.com/news/busines...rC2Cr.dpuf

[kayhian]

CapitaMall Trust: Resiliency amid challenges

CapitaMall Trust (CMT) reported its 1Q15 results which met our expectations. Gross revenue inched up 1.6% YoY to S$167.4m, while DPU grew at a stronger pace of 4.3% to 2.68 S cents. During the quarter, CMT managed to obtain positive rental reversions of 6.1%. Another encouraging sign came from the second consecutive quarter of YoY increase in both its shopper traffic and tenants’ sales psf. In terms of financial position and capital management, CMT’s aggregate leverage ratio remains healthy at 33.8%, while ~98.3% of its total debt are on a fixed rate basis or have been hedged. Given this set of in-line results, we are keeping our forecasts intact. Reiterate our HOLD rating and S$2.21 fair value estimate on CMT. The stock is currently trading at FY15F P/B ratio of 1.23x and distribution yield of 5.0%, which do not appear compelling, in our view. (Wong Teck Ching Andy)

[Boon]

CMT exploring how to unlock Funan's space value

Rennie Whang
The Straits Times
Saturday, Jul 18 2015

CapitaLand Mall Trust (CMT) may finally be closer to unlocking the value of its additional gross floor area at Funan DigitaLife Mall after years of speculation on the space.

In a Singapore Exchange filing on Wednesday evening, the trust's manager said it is "exploring its options" with regard to the mall.

The options include disposing of or redeveloping the centre, it added.

The mall received provisional permission in 2007 to build a nine-storey commercial block of mostly offices to maximise unutilised GFA. These plans were put on the back burner due to the global financial crisis and weak sentiment.

According to last year's URA Masterplan, the plot ratio for Funan is 7, but currently it is built only up to about 4.3, noted Cushman & Wakefield research director Christine Li.

The extra 380,000 sq ft or so of unused GFA would likely be used for offices, said Mr Desmond Sim, CBRE head of research for Singapore and South-east Asia.

"There is a maximum threshold to how many levels of retail space make sense. Upwards of four floors, the rent one can command would be comparable to office rents."

Redevelopment is also an option as the mall's design may be inefficient for modern retail requirements, said Chestertons managing director Donald Han. "For example, as an IT mall, you have many goods lifts, which is not so effective in an age where everyone uses smartphones and desktops are no longer in demand... The basement area, usually dense in pedestrian footfall, has not been well-utilised as well, as it is mainly used as a carpark."

Funan's value was stated at $361 million as at Dec 31. It appears to have been performing worse than CMT's other assets. Its annual report last year showed it had the second-lowest rental reversion across all malls in the portfolio.

Its occupancy rate dipped from 100 per cent in 2012 to 97.9 per cent last year, while its net property income fell from $22.1 million in 2013 to $21.7 million last year.

Possible suitors could come from private equity, said Mr Han. CLSA Capital Partners, for example, bought retail and office development PoMo in 2011, later selling it to a joint venture between BS Capital and Enviro-Hub Holdings in 2013.

"There is a lot of private equity money that is hungry for retail assets, and there are not many of such assets with redevelopment potential in the central area," he said.

http://business.asiaone.com/news/cmt-exp...pace-value

(not vested)

[Dividend Knight]

Funan DigitaLife Mall to be redeveloped as an 'experiential creative hub'

CapitaLand Mall Trust Management Limited (CMTML) said on Thursday (Dec 10) it will be redeveloping Funan DigitaLife Mall into an integrated development.

Located in North Bridge Road in the downtown core of Singapore, the popular IT mall has utilised 3.861 of its allowable Gross Plot Ratio of 7.0, said the manager of CapitaLand Mall Trust in a statement posted on the Singapore Exchange website.

Thus the mall currently has an untapped gross floor area (GFA) of about 388,000 sq ft.

The redevelopment of Funan DigitaLife Mall will maximise the full potential of its site and excellent location, the trust manager added.

CMTML chief executive officer Wilson Tan said: "Given its excellent location and the strong potential for an integrated development on this site, we believe that the redevelopment of Funan DigitaLife Mall will create the greatest value for our unit holders.

"The new building on the Funan site will be an aspirational lifestyle destination that will enthrall shoppers and retailers. It will be an experiential creative hub within the city that engages communities to incubate new ideas and passions, and enables shoppers to enjoy retail in a technology-enabled environment."

The redeveloped mall will also serve as a "collaborative platform to connect retail, cultural, learning and business opportunities, and play a big part in the rejuvenation of the Civic District", Mr Tan said.

The mall is expected to close in the third quarter of next year, with redevelopment works commencing soon after and taking about three years.

CMTML will continue to refine the concept for the new integrated development and share further details in due course, it said.

Source: ST

[CY09]

It's pretty amazing how capitaland and its valuers are valuing the properties. Using URA's data for June 2012 to June 2015 as a comparison, the retail property price index has risen by 5.4%. Remarkably, CapitaMall Trust's s$ per square feet for NLA across its portfolio have risen by 6%-20% (average approx 12%) across the same period!

To add on, most of these properties (except Plaza Singapura) are on 99 year leasehold which means since then, they have lost 3 years of their lease, yet their values rose way faster than national average. Pretty confused how CMT's valuers are doing their calculation and if valuation have been appropriately done.

CapitaMall Trust Property value (end 2012), PDF Page 21
http://infopub.sgx.com/FileOpen/CMTMacqA...leID=60504

CapitaMall Trust Property value (end June 2015), PDF Page 11
http://infopub.sgx.com/FileOpen/20151130...eID=380348

URA's 2Q 2012 index
https://www.ura.gov.sg/uol/media-room/ne...-79a3.ashx

URA 2Q 2015 index
https://www.ura.gov.sg/uol/media-room/ne...15-39.aspx

[postage paid]

It's pretty amazing how capitaland and its valuers are valuing the properties. Using URA's data for end 2012 to June 2015 as a comparison, the retail property price index has risen by 5.4%. Remarkably, CapitaMall Trust's s$ per square feet for NLA across its portfolio have risen by 6%-20% (average approx 12%) across the same period!

To add on, most of these properties (except Plaza Singapura) are on 99 year leasehold which means since then, they have lost 2.5 years of their lease, yet their values rose way faster than national average. Pretty confused how CMT's valuers are doing their calculation and if valuation have been appropriately done.

CapitaMall Trust Property value (end 2012), PDF Page 21
http://infopub.sgx.com/FileOpen/CMTMacqA...leID=60504

CapitaMall Trust Property value (end June 2015), PDF Page 11
http://infopub.sgx.com/FileOpen/20151130...eID=380348

URA's end 2012 index
https://www.ura.gov.sg/uol/media-room/ne...-06a1.ashx

URA 2Q 2015 index
https://www.ura.gov.sg/uol/media-room/ne...15-39.aspx

1. Capitaland pays the valuers

2. In my opinion Capitaland malls are much better managed than the average mall

3. Capitaland has pricing power

4. Capitaland has lower than average cost of capital