CapitaMalls Malaysia REIT chalks up higher profit

CapitaMalls Malaysia REIT Management Sdn Bhd (CMRM) posted a higher pre-tax profit of RM179.814 million for the financial year ended December 31 2011 compared with RM109.396 million previously.

In a statement, the company said the better performance was attributable to revenue growth at the mall level and savings in financing costs.

CMRM’s acquisitions last year of Gurney Plaza Extension and East Coast Mall contributed to earnings, it said.

The manager of CapitaMalls Malaysia Trust’s (CMMT) said revenue rose to RM230.887 million from RM94.636 million in the same period a year earlier.

It said CMMT achieved a distribution per unit (DPU) of 7.87 sen during the year, 8.4 per cent higher than the annualised DPU of 7.26 sen previously.

CMMT recorded net property income (NPI) of RM162.4 million, 1.6 per cent higher than the forecast NPI of RM159.8 million.

The total distributable income was RM118.3 million, eight per cent higher than the forecast distributable income of RM109.5 million for the year, CMRM said. Bernama

CMMT in RM310m Kuantan mall deal

CAPITALAND’S Malaysia-listed property trust, CapitaMalls Malaysia Trust (CMMT), said yesterday that it has agreed to buy East Coast Mall in Kuantan, Malaysia, for RM310 million (S$126 million). Including the acquisition fee and expenses, the total acquisition cost is about RM330 million. CMMT intends to fund the acquisition through a combination of debt and equity. This will include the proposed placement of up to 299 million new CMMT units to unidentified parties at a price that will be determined later.

Sharon Lim, chief executive of the trust’s manager, said that in addition to funding the acquisition, the share placement will increase the stock’s trading liquidity and allow CMMT to attract even more local and international institutional investors and enlarge its unitholder base.

East Coast Mall is a four-storey shopping mall with a net lettable area of more than 440,000 square feet. The mall has an occupancy rate of 97 per cent. The forecast property yield for 2011 is about 7.1 per cent. Based on CMMT’s closing price of RM1.17 on Monday, CMMT’s implied property yield for 2011 is about 6.4 per cent. Hence the acquisition is yield-accretive to CMMT unitholders, the trust said. The proposed acquisition and share placement are expected to be completed by the last quarter of 2011.

CMMT, which now has three malls in its portfolio, was listed on Bursa Malaysia in July 2010. CapitaLand owns an indirect stake of 27.3 per cent in the trust through CapitaMalls Asia.

CMMT makes debut, looks to long-term resilience

Reit’s IPO proceeds will be channelled into new assets, says CapitaMalls Asia chief

CAPITAMALLS Malaysia Trust (CMMT) made its debut on the Malaysian stock exchange yesterday, stressing its long-term resilience despite a tepid launch.

CapitaMalls Asia (CMA) chief executive Lim Beng Chee said the Reit’s portfolio of RM2.1 billion (S$897 million) will be expanded gradually, with the proceeds of some RM800 million raised from the initial public offer to be injected into a RM1 billion fund that will serve as a pipeline for new assets.

CMA is the controlling shareholder of CMMT’s manager, CapitaMalls Malaysia Reit Management (CMRM), and its sponsor.

CMMT opened at 98.5 sen – half a sen above its retail price but slightly below its institutional price of RM1 a unit, echoing a similar debut by Malaysia’s largest trust, Sunway Reit.

Mr Lim attributed CMMT’s sluggish start to local investors’ lack of Reit exposure, noting that CapitaMall Trust (CMT)’s listing experience in 2002 was also not well received initially by Singapore investors.

Nonetheless, investors have become more knowledgeable, and over the past seven to eight years CMT has proved its resilience, expanding its portfolio almost 10 times to $7.5 billion from $800 million, he pointed out.

Malaysia’s largest pure-play retail Reit, with a market capitalisation of RM1.3 billion, CMMT is also one of the most liquid, with a free-float of 67 per cent. CMA holds almost 42 per cent of CMMT, in which cornerstone investors the Employees Provident Fund and Great Eastern Life Assurance Malaysia own an aggregate 11.4 per cent.

Mr Lim said the RM1 billion fund will be set up within a year, and assured the Reit will grow – ‘otherwise there is no point to listing CMMT in Malaysia’.

Its three current assets – Gurney Plaza in Penang, Sungei Wang Plaza in Kuala Lumpur and The Mines in Selangor – have an average 97 per cent occupancy rate and form part of CMA’s portfolio of 87 properties in five countries.

On Malaysia, Mr Lim said it is attractive because ‘you can buy income-producing assets from day one’. But he indicated that building from the ground up is also something CMA is prepared to do – ‘if we find something interesting.’

CMRM chief executive Sharon Lim said potential income-producing assets will be acquired by the Reit, while CMA will manage the non-income producing ones or those in the development stage, with a view to injecting them into CMMT later.

In the meantime, she said, CMRM will maximise its real estate to drive sales and ultimately yields, having managed to improve the yield from its existing assets by about one per cent to 7.2 per cent.

It has budgeted RM100 million over 2010 and 2011 for asset enhancement and capital expenditure. ‘Every year there will be things to do as retail trends change,’ Ms Lim said.

At 98 sen a unit, retail investors are expected to receive a yield of 7.3 per cent for 2010 and 7.6 per cent the year after – returns Mr Lim said are very attractive compared with government bonds at 4 per cent and fixed deposits at 3 per cent.

‘From my perspective it’s not below the IPO price as the retail price was 98 sen. Institutional investors aren’t selling – they can see there’s more value to the Reit that can be delivered over time.’

CMMT touched an intra-day low of 97.5 sen before finishing at 98 sen.

CMA prices M’sia trust at bottom of range

CapitaMalls M’sia Trust is scheduled to list on July16

CapitaMalls Asia Ltd (CMA), owner of shopping malls in the region, said it priced shares of its Malaysian unit at the low end of its projected range, raising investor concerns that gains may be capped when trading begins.

CapitaMalls Malaysia Trust’s units were offered to institutions at RM1 apiece, while shares were sold to individual investors at 98 sen each, it said.

The RM852 million initial public offering (IPO), the second-biggest in Malaysia this year, was earlier priced at between RM1 and RM1.10 a share for large investors.

‘The upside on the capital appreciation potential can be quite limited,’ said Scott Lim, chief executive officer of MIDF Amanah Asset Management Bhd in Kuala Lumpur, which manages the equivalent of US$670 million. ‘Most of the properties inside the Reit are priced at market, they’re already at present market value and they’re not undervalued assets.’

The IPO follows the RM1.5 billion raised by Sunway Real Estate Investment Trust in its initial sale last month and underscores rising investor appetite for equities in Malaysia amid an economic rebound from last year’s recession. CapitaMalls Malaysia’s IPO may be surpassed by share sales of two units of state oil and gas company Petroliam Nasional Bhd.

Sunway Reit fell on its trading debut yesterday, closing at 88.5 sen at the midday break, from its institutional offer price of 90 sen.

‘It’s ok. These things happen,’ Jeffrey Cheah, chairman of its parent company Sunway City Bhd, told reporters in Kuala Lumpur today. ‘It’s a very difficult market. I don’t look at just today. I look at longer term.’

CapitaMalls Malaysia Trust is scheduled to list on July 16 when JPMorgan Chase & Co will act as stabilising manager, the company said in a separate exchange filing yesterday.

JPMorgan, CIMB Investment Bank Bhd, and Maybank Investment Bank Bhd are jointly managing the sale.

‘It is a good proxy to the Malaysian Reit sector that we believe is due for another round of re-rating,’ Joshua Ng, an analyst at RHB Research Institute Sdn, said in a report yesterday. ‘Its growth prospects are good, underpinned by growing rentals and acquisitions.’

Singapore-based CMA, part of South-east Asia’s biggest developer CapitaLand Ltd, owns shopping malls in China, India and Singapore. CapitaMalls Malaysia is the owner of the Sungei Wang Mall in Kuala Lumpur, The Mines mall, which is south of the city centre, and Gurney Plaza in Penang, according to the company’s prospectus.

‘We are heartened by the success of the offering,’ CMA chief executive officer Lim Beng Chee said in the statement. ‘Despite the challenging market conditions, it is priced at one of the tightest yields for a Malaysian Reit initial public offering.’ – Bloomberg

CapitaMalls REIT listing expected to raise RM864mil

It is expected to be Malaysia’s largest shopping mall REIT

PETALING JAYA: CapitaMalls Asia Ltd, one of Asia’s largest listed shopping mall developers, owners and managers by property value and geographic reach, has launched the prospectus and retail portion of what will be the largest shopping mall REIT (real estate investment trust) in Malaysia to date.

CapitaMalls Asia is part of Southeast Asia’s largest property developer Singapore’s CapitaLand Ltd.

The listing of CapitaMalls Malaysia Trust (CMMT) REIT on the Main Market of Bursa Malaysia on July 16 is expected to have a market capitalisation of RM1.4bil if an over-allotment option of up to 15% of the offering of 786 million units is exercised. If this portion is not exercised, it may raise RM864mil.

Its initial portfolio of three shopping malls – Gurney Plaza in Penang, Sungei Wang Plaza in Kuala Lumpur and The Mines in Selangor – has a total net lettable area of 1.88 million sq ft and has been valued at RM2.13 bil.

The CMMT IPO will have a total of 1.35 billion units in issue, of which 719 million units were offered to institutional investors at between RM1 and RM1.10 each in late June and 67.5 million units for individual investors at an indicative price of RM1.08 yesterday, with a forecast distribution yield of 6.9% for 2011. The final price will be determined on July 8.

CapitaMalls Asia CEO Lim Beng Chee told a press conference that occupancy and rental yields had increased for all three malls in its stable despite a weak economy in the last two years.

“We see acquisition opportunities in Malaysia’s shopping mall sector, with its fragmented ownership structure.

“CapitaMalls Asia will give CMMT a right of first refusal over any retail properties that we may acquire in future, including the extension that is being carried out at Penang’s Gurney Plaza. If acquired, Gurney Plaza extension will increase CMMT’s asset size by about 11%,” he said.

CIMB Investment Bank Bhd, JPMorgan Chase & Co and Maybank Investment Bank Bhd are jointly managing the IPO sale.

“As part of our long-term commitment, CapitaMalls Asia also plans to set up a Malaysia retail property fund to acquire and develop retail properties in Malaysia. CMMT will similarly have a right of first refusal over this pipeline of retail properties,” Lim said.

CIMB Investment Bank Bhd, JPMorgan Chase & Co and Maybank Investment Bank Bhd are jointly managing the sale. -ends-

Individual investors will get a refund if the final price for institutional investors is lower than the retail price.

CMMT’s sponsor, CapitaMalls Asia Ltd, will retain a stake of 41.74% in CMMT.

If an over-allotment option of up to 117 million units is exercised, CapitaMalls Asia’s stake in CMMT will be 33%.

The IPO follows the RM1.5bil raised by Sunway Real Estate Investment Trust in its initial sale last week and underscores rising investor appetite for equities in Malaysia amid an economic rebound.

SINGAPORE – CapitalMalls Malaysia Trust (CMMT) is offering shares at RM1.08 (US$0.332) for its Malaysian initial public offering. Distribution yield is expected at 6.9 per cent (7.45 sen) for 2011.

At RM1.08, CMMT could raise up to RM849.44 million from the IPO.

CMMT is the Malaysian unit of shopping malls operator, CapitaMalls Asia (CMA). It has three shopping malls valued at RM2.13 billion – Gurney Plaza in Penang, an interest in Sungei Wang Plaza in Kuala Lumpur, and The Mines in Selangor.

A total 786.522 million units are offered, 67.5 million for retail investors and 719 for institutional investors. CMA will retain a stake of 41.74 per cent in CMMT.

However, if there is an over-allotment option issue of 118 million units, which if exercised, would reduce the stake in CMA to 33 per cent.

The Employees Provident Fund Board of Malaysia and Great Eastern Life Assurance (Malaysia) Berhad have signed up as cornerstone investors for the IPO to subscribe for 90,000,000 units inaggregate, which is 11.4 per cent of the total units offered.

The cornerstone investors have agreed to pay RM1.10 per unit or the institutional price, whichever is lower.

The final retail price will be the lower of the retail offer price of RM1.08 per unit or the institutional price less a discount of 2 sen. The institutional price will be determined by way ofbookbuilding.

The offering closes July 5 and the shares are expected to be listed the main board on Bursa Malaysia on July 16.