CapitaLand Mall Trust's Q4 DPU up at 2.9 cents

CapitaLand Mall Trust saw higher occupancy at The Atrium@ Orchard. However, the Reit's manager expects competition in the retail sector to be intense, with new retail space coming onstream.
CapitaLand Mall Trust saw higher occupancy at The Atrium@ Orchard. However, the Reit's manager expects competition in the retail sector to be intense, with new retail space coming onstream.ST FILE PHOTO

Higher occupancy at Bugis Junction, The Atrium@Orchard pushes up net property income

CapitaLand Mall Trust defied gloom among brick-and-mortar retailers to put in a solid performance in the fourth quarter.

Singapore's first and largest retail Reit will pay distribution per unit (DPU) of 2.9 cents on Feb 28, the manager announced yesterday.

This was up by 0.7 per cent from the previous year and came on a distributable income of $102.9 million for the three months to Dec 31.

Net property income was $119.3 million, up 2.6 per cent on a 1.8 per cent rise in gross revenue to $172.4 million.

The increase was mainly due to higher occupancy at Bugis Junction and The Atrium@Orchard.

Mr Richard Magnus, chairman of the Reit's manager, said in a statement that the trust "has delivered another set of stable results in 2017, despite the challenges facing the retail industry".

"While Singapore's GDP (gross domestic product) growth forecast in 2018 is expected to be stable, competition in the retail sector will remain intense, with new retail space coming onstream," he added. DPU for the full year stood at 11.16 cents, 0.3 per cent higher than in 2016.

  • AT A GLANCE 

  • GROSS REVENUE: 
    $682.5 million (-1.1%)

    NET PROPERTY INCOME: 
    $478.2 million (-0.3%)

    DISTRIBUTION PER UNIT: 
    11.16 cents (+0.3%)

Distributable income rose 0.4 per cent to $395.8 million, as CapitaLand Mall Trust had retained a larger sum of money the previous year for general corporate and working capital purposes.

But net property income dipped by 0.3 per cent to $478.2 million while gross revenue slipped 1.1 per cent to $682.5 million.

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

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

Still, on a comparable mall basis - that is, excluding both Funan and Rivervale Mall, which was sold in December 2015 - the manager said gross revenue was actually up by 0.6 per cent year-on-year, while net property income rose 1.2 per cent.

Mr Tony Tan, chief executive of the manager, told a briefing at Capital Tower yesterday: "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."

He also 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 next year, but "completion could potentially be one quarter early", he said.

CapitaLand Mall Trust has a portfolio of 16 malls here, including IMM Building, Plaza Singapura and a 40 per cent stake in Raffles City.

The units closed up three cents to $2.08 after the results were released.

A version of this article appeared in the print edition of The Straits Times on January 25, 2018, with the headline 'CapitaLand Mall Trust's Q4 DPU up at 2.9 cents'. Print Edition | Subscribe