CMT – BT

CMT Q4 income rises to $62m

CAPITAMALL Trust (CMT) yesterday posted distributable income of $62.27 million for the fourth quarter of last year, 19 per cent higher than the preceding corresponding quarter’s $52.33 million. Full-year distributable income rose 24.7 per cent to $211.19 million.

And the trust’s manager is forecasting a 9.5 per cent growth in distributable income for this year to $231.3 million.

The trust committed $168.6 million total capital expenditure for asset enhancements across eight retail properties last year, and is projecting further capex of $153.2 million this year and $112.3 million next year.

The higher distributable income for the year ended Dec 31, 2007, was on the back of a 30.2 per cent increase in gross revenue to $431.86 million – due mainly to a full-year’s contribution from CMT’s 40 per cent stake in Raffles City acquired on Sept 1, 2006, as well as contributions from the three malls in the CapitaRetail Singapore portfolio. Other malls also accounted for higher revenue due mainly to new and renewed leases at higher rates as well as higher revenue from major asset enhancement initiatives at IMM Building.

As CMT completed an equity fund raising exercise on Nov 6 last year, its latest payout to unit holders will be for the period of Nov 7 to Dec 31 of 2007. The distribution per unit (DPU) of 2.34 cents works out to an annualised figure of 15.53 cents, translating to a 5.8 per cent distribution yield based on CMT’s closing price of $2.66 yesterday.

The counter ended one cent higher yesterday after plunging to a 52-week low of $2.50 in early morning trade. CMT’s unit price has lost 38.4 per cent from its 52-week high of $4.32 reached in May last year on the back of the stock market slide. Nonetheless, since its inception in 2002, CMT has achieved an average annual DPU growth of 12.8 per cent.

CMT’s portfolio valuation increased $200 million within eight months to $5.8 billion, resulting in net asset value per unit rising from $1.87 as at Dec 31, 2006 to $2.21 as at Dec 31, 2007.

‘Going forward, with a a strong capital structure and relatively low gearing of 34.7 per cent, we are well-positioned to capture yield-accretive opportunities presented in the market and are on track to achieve our local target asset size of $8 billion by 2010,’ said CapitaMall Trust Management Ltd’s CEO Pua Seck Guan.

The $8 billion target size is based on a secured pipeline of malls in parent CapitaLand’s portfolio – ION Orchard (50 per cent stake), Clarke Quay and the mall in the one north precinct.

Mr Pua is also optimistic about growth prospects for Singapore retail rents, pointing out that unlike residential and office rents, they have yet to surpass the last high in 1996/1997.

As well, prime Singapore retail rents are about 20-30 per cent of New York’s and 40-50 per cent of Hong Kong’s.

New attractions like the Integrated Resorts and F1, as well as population growth have been resulting in an influx of new international retailers into Singapore, which will provide depth to the local retail market, he noted.

CMTML’s 13.90-cent DPU forecast for full-year 2008 compares with 13.34 cents for full-year 2007.