Thursday, April 22, 2010

CMT optimistic of future growth

Its Q1 distributable income rises 13.6%; net property income up 5.7%

CAPITAMALL Trust (CMT) yesterday posted stronger results for the first quarter ended March 31 and signalled optimism ahead.

There will be more asset enhancement initiatives at Junction 8 and Tampines Mall. Ongoing works at Raffles City Singapore and Jurong Entertainment Centre are also on schedule.

‘We are now firing up all three engines of our growth strategy, comprising active lease management, asset enhancements and yield-accretive acquisitions,’ said Simon Ho, CEO of CMT Management. ‘We will also continue to be on the look-out for selective acquisition opportunities.’

CMT Management chairman James Koh also said that CMT ‘is poised to benefit further from the broad economic recovery and expected growth of tourist arrivals’.

CMT’s net property income in Q1 was $97.7 million, up 5.7 per cent from a year ago. Earnings improved as rents for new and renewed leases rose and operating and interest expenses fell. There was also greater contribution from Sembawang Shopping Centre after refurbishment works were complete.

Distributable income to unitholders grew 13.6 per cent over the same period to $71.1 million. Distribution per unit (DPU) for Q1 was 2.23 cents, and unitholders can receive this payout on May 27.

This DPU is 13.2 per cent higher than the 1.97 cents a year ago. The annualised DPU in Q1 was 9.04 cents, translating to a yield of 4.9 per cent based on CMT’s closing unit price of $1.86 on Tuesday.

The counter ended trading at $1.85 yesterday, one cent down.

CMT’s recent purchase of Clarke Quay brought its asset size as at March 31 to $7.8 billion. Its portfolio occupancy rate was 99.4 per cent, down from 99.8 per cent three months ago.

CMT is building a two-storey food and beverage annex block at Junction 8, which will have a net lettable area (NLA) of some 3,500 square feet. It will also reconfigure some retail units at Tampines Mall and relocate a taxi stand there. Works at these malls are expected to be done by the end of this year.

Meanwhile, asset enhancement works at Raffles City Singapore are also due for completion by year-end. Of the additional NLA of 16,285 sq ft to be created at Basements 1 and 2, over 70 per cent has been leased.

CMT said some years back that it might integrate Atrium@Orchard with Plaza Singapura and create more retail space. It told BT that the plan is under review, and there will be an announcement when it is firmed up.

CMT has refinanced all borrowings due this year with the issuance of medium-term notes in January, March and April. Taking the April issue into account, its pro forma gearing ratio as at March 31 would be 34.7 per cent.

Source: Business Times, 22 Apr 2010

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