Thursday, June 28, 2012
CapitaRetail China Trust
CapitaRetail China Trust: OCBC maintains Buy with $1.44 TP. House note that the rent from the four malls that CRCT owns in Beijing contributed 69% of 2011’s revenue. According to Savills, the supply of shopping mall space in Beijing is set to increase by a significant 17% this year, or some 1.06m sqm. Despite this increase, believe that CRCT’s Beijing malls are well placed to compete. CapitaMall Xizhimen, is located at the transportation hub Xizhimen and sees a daily footfall of 85k-90k people, which gives it much bargaining power. CapitaMall Anzhen and CapitaMall Shuangjing are on long-term master lease structures, thus their rents should be fairly immune to the upcoming supply. While shopping mall supply could increase by ~21% in 2012 in the area, believe CapitaMall Wangjing has an incumbent’s advantage, being voted 'Most Influential Mall in Wangjing Area' by Beijing News in 2010.