CapitaMall Trust

CapitaMall Trust: DBS Vickers sees CMT’s Hougang Plaza divestment as a small but astute move, enabling the Reit to lock in a nice $83.8m gain. House believes this was part of CMT's portfolio-evaluation strategy of divesting none-core and non-performing malls. Given the ageing mall and relative small footprint, it views this divestment positively. On a recent visit, DBSV noted the mall needs significant capex to maintain in order to sharpen its competitive edge given nearby and upcoming malls. Assuming proceeds are used to pay down debt, it expects interest savings, with FY12-13 DPU to rise a marginal 1-2%. The divestment will improve its financial flexibility to redeploy funds to other more value-accretive sources and strengthen the portfolio going forward. Meanwhile, the gradual completion of the asset-enhancement-initiative works at Clarke Quay, Illuma and The Atrium in the 2H will continue to lift earnings and rejuvenate its portfolio in the medium term. DBSV keeps its Buy call with $2.05 target