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CapitaLand Mall Trust's Q4 DPU up 0.7%

HIGHER occupancy for Bugis Junction and The Atrium@Orchard gave a fillip to results for retail owner CapitaLand Mall Trust (CMT) for its fourth quarter.

Distribution per unit edged up 0.7 per cent to 2.9 Singapore cents from 2.88 Singapore cents for the previous year, the group said in a Singapore Exchange filing on Wednesday morning.

That came as the quarter's income available for distribution crept up 0.8 per cent to S$102.9 million from the year-ago period.

For the fourth-quarter ended Dec 31, CMT released S$7.6 million of its taxable income available for distribution retained in the first half of fiscal 2017 to unitholders.

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Advanced distribution comprising tax-exempt income of S$4.8 million received from CapitaLand Retail China Trust (CRCT) between July 1, 2017 and Dec 6, 2017 had been retained for general corporate and working capital purposes, it added.

For the quarter, gross revenue rose 1.8 per cent to S$172.4 million from the preceding year. Net property income increased 2.6 per cent to S$119.3 million from the previous year.

The increase in net property income was partially offset by lower gross revenue from Bedok Mall due to lower rental rates achieved for new and renewed leases and lower occupancy, the trust manager said.

Tony Tan, chief executive officer of CMT's manager added: "Our portfolio of malls continued to be popular with retailers, registering a high occupancy of 99.2 per cent as at Dec 31."

"We know the top line is under a little bit of pressure, but what we can do is ensure that we operate as efficiently as possible," Mr Tan said at an earnings briefing at Capital Tower in the morning.

Gross revenue for the full year was down by 1.1 per cent to S$682.5 million, and net property income lower by 0.3 per cent to S$478.2 million.

The decline was mainly due to Funan mall's temporary closure for redevelopment, in mid-2016.

On a comparable mall basis - which would also exclude Rivervale Mall, sold in December 2015 - the manager said that gross revenue was actually up by 0.6 per cent year on year, and net property income up by 1.2 per cent.

Other drags on turnover included lower rental rates for both new and renewed leases, and lower occupancy at Bedok Mall.

But Mr Tan hinted that strong momentum in the construction process is giving Funan a "high chance" of coming in ahead of schedule.

It had been slated to reopen in the fourth quarter of 2019, but "completion potentially could be one quarter early", he said.

To a question on the potential impact of the much anticipated hike in goods and services tax (GST), Mr Tan said: "Initially, I expect a bit of a knee jerk. It depends on the quantum."

But he added that consumer reaction will also depend on the general state of the economy and spending sentiment.

"GST is an irritant, but I don't think it will be a major dampener," he said. "It is not something new."

Richard Magnus, chairman of CMT's manager, said: "CMT has delivered another set of stable results in 2017, despite the challenges facing the retail industry. This points to the underlying strength of our well-located malls, and the management's continuous focus on enhancing our mall's offering as well as improving on operational efficiency."

CMT's other properties include Plaza Singapura and IMM Building.

CMT units ended S$0.02 or one per cent lower at S$2.05 on Tuesday.

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