My Personal Analysis of Capitaland Mall Trust

With the recent US presidential election and almost certain news that Fed will increase interest rate, prices of most REITs have fallen to attractive levels. Today, I have bought more of Capitaland Mall Trust. I have noticed that there is much retail REIT component in my stock portfolio and thus made the decision to add more of Capitaland Mall Trust. The current weakness poses an opportunity for me.

Of course, I did some basic personal analysis as below.

Financial Summary

Needless to say, the financials of Capitaland Mall Trust is pretty solid to me. In current economic conditions, Capitaland Mall Trust still managed to achieve a Net Property Income (NPI) growth of 6.8% year on year.

Distribution for 3Q 2015 included the release of S$8.0 million of taxable income retained in 1Q 2015. Excluding this, 3Q 2016 distributable income to Unitholders would have been 3.3% higher year-on-year.

Debt

100% of Capitaland Mall Trust assets remain unencumbered. Gearing stood at 35.4%.

Current Valuation

If you look at the historical price of Capitaland Mall Trust, you will notice there are three low points. The closing price at 15th June 2012 is S$1.79, S$1.815 on 14th February 2014 and S$1.865 on 13th November 2015.

As of 25th November 2016, the closing price of Capitaland Mall Trust is S$1.92 which is at attractive levels. Based on FY15 distribution yield of 11.25 cents, this will translate to an annualized dividend yield of 5.86%.

Asset Enhancement Initiative

With Funan undergoing a major face lift and Raffles City Shopping Centre undergoing asset enhancement initiative (“AEI”) from 3Q 2016 to 1Q 2018, Capitaland Mall Trust is a long term play for investors. I will continue to hold for its stable dividends payout while waiting for Funan and AEI of its other shopping malls to complete and add further value to it.