CapitaLand Mall Trust posts 0.7% rise in DPU for 4th quarter

CapitaLand Mall Trust's shopper traffic grew 4.9 per cent last year and its tenants' sale per square foot per month increased 5.3 per cent, compared with a year earlier. It completed the acquisition of Bedok Mall (above) on Oct 1 last year.
CapitaLand Mall Trust's shopper traffic grew 4.9 per cent last year and its tenants' sale per square foot per month increased 5.3 per cent, compared with a year earlier. It completed the acquisition of Bedok Mall (above) on Oct 1 last year.PHOTO: CAPITALAND

Q4 distributable income for CapitaLand Mall Trust's up 2.8% to $102m; net property income up 18.6% to $126m

The acquisition of Bedok Mall boosted property income for mall landlord CapitaLand Mall Trust (CMT) in the fourth quarter.

Distribution per unit (DPU) for the three months to Dec 31 inched up 0.7 per cent to 2.88 cents, compared with 2.86 cents for the same period a year earlier.

Unit holders can expect to receive their distribution on Feb 29, said the trust manager yesterday.

Distributable income for the quarter grew 2.8 per cent to $101.9 million. Net property income jumped 18.6 per cent to $125.7 million, while gross revenue increased 9.2 per cent to $180.4 million.

Bedok Mall, which was acquired on Oct 1 last year, accounted for the bulk of the increase in gross revenue but this was partially offset by a decrease in gross turnover from JCube due to lower occupancy.

DPU increased 3.8 per cent to 11.25 cents for the full year. Net property income grew 4 per cent to $466.2 million, while gross revenue rose 1.5 per cent to $669 million.

  • AT A GLANCE

  • GROSS REVENUE: $180.4 million (+9.2%)

    NET PROPERTY INCOME: $125.7 million (+18.6%)

    DISTRIBUTABLE INCOME: $101.9 million (+2.8%)

    DISTRIBUTION PER UNIT:  2.88 cents (+0.7%)

CMT's shopper traffic grew 4.9 per cent and its tenants' sale per square foot per month increased 5.3 per cent last year, compared with a year earlier. Portfolio occupancy stood at 97.6 per cent as of Dec 31. Rental reversions for the year came in at 3.7 per cent, a significant drop from the 6 per cent level the trust has maintained from 2010 to 2014.

Mr Wilson Tan, chief executive of the trust manager, told a briefing yesterday that he expects the rental reversions to continue to decline this year. "There is a possibility that we could see negative rental reversions in some quarters," he said.

He pointed out that structural changes in Singapore, such as the move to a progressive wage model, have driven costs up by some 30 per cent. The increased pressures on businesses have caused some of them to leave the marketplace, and this has a derivative impact on the rental market, he added.

The trust manager had announced last month that it would close Funan DigitaLife Mall for redevelopment starting from June this year.

While the concrete plans are still not ready for public disclosure, Mr Tan said that it will have office and retail components. He believes that this is the right time to redevelop Funan, just when the market is going through a difficult time.

"By 2019 (when the redevelopment works are completed), the market would have shifted gear, and we can go out and do very well with Funan," he said.

Calling such a strategy "counter-intuitive", Mr Tan pointed out that the trust manager has been spending more money on renovating its malls, compared with its competitors in the last two years, despite a soft market. "We are going through a restructuring in terms of the economy; if we don't go out to make changes in our assets now, when the economy turns (for the better), we may miss it."

CMT units went up 0.5 cent to close at $1.965 yesterday.

A version of this article appeared in the print edition of The Straits Times on January 23, 2016, with the headline 'CMT posts 0.7% rise in DPU for 4th quarter'. Print Edition | Subscribe