CapitaLand Mall Trust

CapitaLand Mall Trust: (S$1.925) Tough underlying environment reflected
CapitaLand Mall Trust (CMT) 4Q15 results came largely in line with DPU of 2.88¢ (+0.7% y/y), bringing FY15 DPU to 11.25¢ (+3.8%).

For the quarter, gross revenue rose to $180.4m (+9.2%) due to a full quarter's contribution from Bedok Mall. However excluding that, Maybank-KE estimated that revenue would have slipped 0.6%, underscoring a tough operating environment on a same store basis.

Similar to its peer Frasers Centrepoint Trust, CMT benefitted from lower utilities expenses from energy savings, which helped raise NPI to $125.7m (+18.6%).

Subsequently, distribution income rose 2.8% to $101.9m, despite the absence of a one-off distribution (4Q14: $4.5m).

Portfolio occupancy improved to 97.6% (+0.8ppt) with weighted average lease to expiry of 2.1 years.

Aggregate leverage crept up to 35.4% (+1.6ppt), with debt tenor of 5.3 years and average interest cost maintained at 3.3%.

For FY15, shopper traffic increased 4.9% across CMT's portfolio, in tandem with tenants' sales psf of 5.3%. The REIT also saw a positive rental reversion of 3.7% across the 16 shopping malls, which slowed from 6.1% in FY14.

Maybank-KE maintains its view that operating environment remains tough for the retail segment. The house last had a Sell rating with TP $1.66, based on 6.75% yield target.