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CapitaLand Mall Trust DPU up 5% at 2.92 S cents for Q3

CAPITALAND Mall Trust (CMT) has posted a third-quarter distribution per unit (DPU) of 2.92 Singapore cents, up 5 per cent from the same period a year earlier, according to results released on Thursday morning.

The manager said in a separate evening announcement that it would launch a proposed private placement of 122 million new units to fund the consolidation of its stake in Westgate mall in Jurong.

Gross revenue for the three months to Sept 30 was S$170.5 million, up 0.7 per cent from the same period a year earlier although contributions from Junction 8, IMM Building, Plaza Singapura, Bedok Mall and Tampines Mall were partially offset by lower gross revenue from Sembawang Shopping Centre, which was divested in June, and lower occupancy and rental rates contracted on new and renewed leases from JCube and Bukit Panjang Plaza.

Net property income rose 1.1 per cent to S$122.7 million. Distributable income rose 4.9 per cent to S$103.5 million.

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Rental reversions were 0.6 per cent. This refers to the increase in current rental rates versus preceding rental rates, typically committed three years ago. Retention rate for tenants was 82.4 per cent.

Shopper traffic so far this year was down 1.8 per cent from Sept 2017. Tenants' sales per square foot per month in the same period rose 0.5 per cent.

Portfolio occupancy as at Sept 30, 2018 was 98.5 per cent, above the market occupancy level of 92.7 per cent, CMT said. Asset enhancement initiatives at Tampines Mall and Westgate are on track to complete in the fourth quarter of 2018.

Funan will open ahead of schedule in the second quarter next year and start contributing income from the second half of 2019, CMT said. Including leases under advanced negotiations, the leasing for Funan’s retail and office components has to date reached about 70 per cent and 60 per cent respectively.

Net asset value per unit was S$2.03 as at Sept 30, up from S$1.95 as at Dec 31.

Unitholders can expect to receive their third-quarter DPU on Nov 30. The books closure date is Nov 7.

The proposed private placement of new units - priced at S$2.049 to S$2.097 apiece - is expected to raise gross proceeds of at least S$250 million, with an upsized option for as much as S$25 million more.

The manager said that the net proceeds, pegged at S$245.6 million, would be used to partially finance the Westgate acquisition, although it added that it had absolute discretion to use the proceeds for other purposes such as the repayment of existing debts.

Meanwhile, any balance of placement proceeds will go towards general corporate and/or working capital purposes, the manager said.

The offer of new units under the private placement will be made to eligible institutional, accredited and other investors. DBS Bank and JPMorgan are the joint bookrunners and underwriters for the exercise.