CapitaLand Mall Trust 1Q2018 Financial Results and Divestment of Sembawang Shopping Mall

CapitaLand Mall Trust, Singapore’s first and largest retail REIT has recently announced a decent set of 1Q2018 financial results. I shall not dwell too much into its financial results as you can judge them yourself based on the results below but all I can say is that I am happy to see Distribution Per Unit (“DPU”) increase by 1.8%.

CapitaLand Mall Trust currently makes up 12% of my stock portfolio and I am excited to receive higher dividends quarter on quarter.

Gross Revenue175,164172,0231.8%
Net Property Income125,651120,0604.7%
Distributable Income98,96396,9732.1%
Distribution Per Unit (“DPU”) (cents)2.782.731.8%

Sale of Sembawang Shopping Centre

On top of the release of its 1Q2018 financial results, the manager has recently announced the sale of one of their asset, Sembawang Shopping Centre for S$248 million to Lian Beng Group and Apricot Capital Pte Ltd. The asset was valued at S$126 million as at 31st December 2017, as such the divestment is expected to generate net proceeds of about S$245.6 million and a net gain of about S$119.6 million when the transaction is completed by June 2018. The mall accounts for only about 1% of CapitaLand Mall Trust total asset value. Thus, I am not expecting much impact to its financials.

Will the net proceeds from the sale of Sembawang Shopping Centre be paid out to shareholders?

I believe the above question is in every shareholder’s mind.

The answer is No. According to the announcement, the net proceeds of S$245.6 million from the sale of Sembawang Shopping Centre (the “Sale”) will be used to repay debt, to finance any capital expenditure and asset enhancement works, and/or to finance general corporate and working capital requirements.

Current Dividend Yield

Based on the distribution of 11.16 cents in 2017 and current share price of S$2.10 on 20th April 2018, the dividend yield is 5.31%. The dividend yield at current price is not attractive to me as such I probably might not add more of CapitaMall Trust to my stock portfolio unless opportunity arises.

An attractive price to enter might be S$1.96 as this translates to a dividend yield of 5.6%.

Asset Enhancement Initiative

Tampines Mall is undergoing AEI again which is expected to complete by 4Q2018. This time round, they are going to build a new Duplex. More space equates to more rent for the manager.


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