CapitaLand Mall Trust posts 3.1% rise in Q4 DPU to 2.99 cents

Revenue was boosted partly from the acquisition of a 70 per cent stake in Westgate.
Revenue was boosted partly from the acquisition of a 70 per cent stake in Westgate.PHOTO: CAPITALAND

SINGAPORE - CapitaLand Mall Trust (CMT) will pay a higher distribution per unit (DPU) for the fourth quarter to Dec 31, 2018, as revenue rose on a consolidated stake in Westgate owner Infinity Mall Trust.

Investors can look forward to DPU of 2.99 cents, against 2.9 cents for the same quarter the year prior, according to full-year financial results released on Wednesday morning (Jan 23).

This comprises an advance DPU of 1.43 cents for the period to Nov 7, 2018, which has already been paid, as well as another 1.56 cents to come, which is based on an enlarged unit base after a private placement of 134.1 million new units on Nov 8, 2018.

Fourth-quarter net property income grew by 4.3 per cent on the previous year, to $124.4 million, while gross revenue was up by 4.7 per cent to $180.5 million.

Besides the acquisition of the 70 per cent stake in Westgate, turnover also increased from higher other income as well as higher gross rental income at IMM and Bedok Mall, said the manager. But JCube, Lot One Shoppers' Mall and Clarke Quay all saw lower occupancies, which ate into revenues.

Distributable income stood at $108.1 million, or 5.1 per cent more than before. Annualised distribution yield for the three months was 5.22 per cent, based on CMT's closing price on Tuesday.

CMT tapped the private placement exercise to pay for some of the Westgate acquisition costs, raising net proceeds of $273.1 million from an issue priced at $2.07 for each unit.

The aggregate leverage of the trust stood at 34.2 per cent at Dec 31, 2018, compared with 31.7 per cent for the quarter before, including its proportionate share of joint ventures' borrowings and deposited property values. The ratio of total gross borrowings to total net assets was 55.2 per cent.

Tony Tan, chief executive of the manager, noted that CMT - Singapore's first real estate investment trust (Reit) - had divested Sembawang Shopping Centre in June 2018 and upped its stake in "a higher-yielding quality asset", Westgate, to spruce up the portfolio over the course of the year.

CMT, which owns 15 shopping centres here, had a portfolio occupancy rate of 99.2 per cent as at Dec 31, 2018, with rental reversion of 0.7 per cent. The weighted-average lease expiry by gross rental income was 1.9 years - not counting Funan, which was closed in July 2016 for redevelopment.

But Mr Tan said that Funan is on track to open in Q2 2019 and has reached leasing of more than 80 per cent, including the leases that are still "under active negotiations".

For the 12 months, CMT clocked net property income of $493.5 million, or 3.2 per cent up on the previous year, on gross revenue growth of 2.2 per cent to $697.5 million.

Distributable income rose by 3.8 per cent to $410.7 million, and full-year DPU was 11.5 cents, against 11.16 cents the year prior.

Richard Magnus, chairman of the manager, said: "Cognisant of the challenges ahead - which include slowdown in the global and Singapore economies, uncertainty in the interest rate environment and competition from the completion of new shopping malls - we remain vigilant and will continually explore new ways to differentiate our malls from the competition and increase customer engagement."

CMT units last closed higher by $0.01, or 0.44 per cent, at $2.27.