CapitaMall Trust: reports 2Q10 results. DPU +7.5% yoy to 2.29cts, translates to 4.6% annualized yield. Driven by higher rental rates for new, strong rental reversions and renewed leases and lower operating expenses. Portfolio occupancy remains strong at 99.5%. Mgt sanguine on outlook, sees improving economic conditions, rising consumer confidence and growing tourist arrivals continuing to spur retail growth in 2H10…
Future growth to be driven by asset enhancement initiatives (AEI) and new properties. Returns on AEI at Raffles city and JCube (formerly Jurong Entertainment Centre) could surprise on the upside, due to higher projected rental revenue and lower construction costs vs earlier expectations. The acquisition of Clark Quay, completed 1 Jul 10, should also contribute positively to rental income from 2H10. Atrium@Orchard is the next AEI target, with upgrade to start in 1Q11 and complete by 3Q12.
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