CMT – CIMB

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• First and largest S-REIT. Listed on the Singapore Exchange in 2002, CMT is the largest REIT in Singapore, and the only REIT to be tracked by the STI. CMT has 13 retail assets under management with a value of S$5.8bn as at Mar 08.

• Balanced portfolio of suburban and prime retail assets. CMT’s portfolio of retail properties are spread across Singapore, balanced between suburban and prime assets and located close to major transportation nodes, with ready population catchments.

• Market leader in retail management. CMT is the market leader in retail management from its continuous asset-enhancement efforts and reconfiguration of malls since listing.

• Asset enhancements and acquisitions to drive growth. CMT is poised for growth via asset enhancements and acquisitions, supported by its parent CapitaLand. We expect CMT to acquire S$2.9bn of properties over 2008-11.

• Initiate with Neutral and DDM-derived target price of S$3.64. We have a target price of S$3.64, using DDM valuation (discount rate 9.7%, terminal growth rate 5%). This offers a total prospective return of 23.8% from potential price upside of 19.3% and a forward yield of 4.5%. We like CMT for its strong management, quality portfolio and high credit rating. However, the relatively pricey acquisition of Atrium@Orchard, with its moderate rental reversions from a
high base, could weigh on its share price in the near term.