Capitamall Trust (CMT)

Capitamall Trust (CMT): Capitamall Trust (CMT) reported 3Q13 results that came in line with consensus estimates, with DPU of 2.56¢ (+5.8% y/y) and distributable income of $88.8m (+9.7%). This brings DPU for 9M13 to 7.55¢, representing an annualized yield of 5.1%. During the quarter, gross revenue climbed 9.1% to $182.4m while NPI rose 12.9% to $126.5m on the back of full contributions from JCube, Bugis+ and Atrium AEIs as well as rent reversion of 6.2%. Meanwhile, this was offset by lower revenue from IMM and Bugis Junction due to the ongoing AEIs. Portfolio occupancy rose 0.4ppts to 99.5% led by Bugis Junction but partly offset by lower occupancy at Funan and Clarke Quay. Balance sheet remains healthy at 34.8% gearing with debt cost of 3.4% and 3.6 years average term to maturity. Going forward, CMT announced a $36m asset enhancement initiative (AEI) at Tampines Mall to increase the NLA by 25,000-30,000 sf (7-9% increase), coming from its level 5 roof area conversion, as well as reconfiguration works on levels 2 and 3. The expected ROI on the AEI is 8%, with the commencing of works scheduled for 1Q2014 and the completion in 4Q2015. As at 30 Sep, CMT had a NAV per unit of $1.71. Latest broker ratings as follows: DB maintains it Hold with TP $2.13 StanChart downgraded to In-Line (from Outperform) with TP $2.00 (from $2.16) Credit Suisse maintains Outperform with TP $2.47 OCBC maintains Buy with TP $2.35 CIMB maintains Neutral with TP $2.12 (from 2.06)