CMT

CMT: announced the sale of Hougang Plaza to Oxley for cash consideration of $119.1m. The sale px is significantly above the asset’s last valuation of $34m. CMT will recognize an estimated net gain on sale of $83.8m after divestment fees. The sale is expected to be completed in Jun ’12. The mall currently contributes 0.5% to the group’s NPI and 0.4% of total portfolio value, hence impact to NAV/sh and DPU is likely minimal. Nevertheless, the sale is timely, with NPI yield on sale at 1.8% being significantly lower than the industry’s 5.5-6.0%. The sales proceeds will provide CMT with greater financial flexibility given CMT’s current leverage of 38% and capex commitments towards asset enhancement & devt project. The sale also reaffirms CMT’s book value. Together with FCOT’s recent divestment of its KeyPoint asset, this may signal a new avenue for Spore trusts to recycle their capital base and unlock high value for non-core assets. BOA-ML maintains Buy with TP $2.00. Believes stock price will react positively to the sale. UOBK maintains Buy with TP $2.10. JPM reiterates Overweight, raises TP to $2.15 from $2.10. Believes this accretive divestment, couple with the strong DPU growth profile will reverse the YTD sh px underperformance. Tips CMT as one of its top picks among S-REITS. Deutsche maintains Hold with TP $1.91. CMT trades at 2012E DPU yield of 5.8%, 1.2x P/B.