CMT still keen to acquire; DPU beats forecast

July 18, 2008
CMT still keen to acquire; DPU beats forecast
By ARTHUR SIM

THE current economic landscape could provide rich pickings for some.

Chief executive of CapitaMall Trust (CMT) management Pua Sek Guan
noted that when the market is 'very good', it is difficult for
acquisitions to be made. 'Today, there are deals to be done,' he said.

While Mr Pua would not say if CMT was looking at any 'deal' in
particular, he did say that single asset owners of retail properties
may want to ask themselves: 'Is this your long-term business?'

He said: 'This business is a skill-set business. You need a platform
to innovate.'

Mr Pua was referring to the CMT's programme of proposed asset
enhancement initiatives (AEI) for assets including the Atrium and
Plaza Singapura, Lot One Shoppers' Mall and Bugis Junction.

CMT expects its AEI capital expenditure outlay for 2008 to be about
$174 million, up from $168.6 million in 2007. But CMT expects
incremental net property income of about $25 million from AEI
completed by end-2009.

Mr Pua was speaking at a press conference to announce CMT's Q2 2008
financial results which saw net property income of $83.6 million, up
24.7 per cent on a year-on-year basis.

Distributable income for the quarter was $58.6 million. This
represents an annualised distribution per unit of 14.16 cents, up
13.2 per cent from the previous corresponding quarter.

Distribution per unit (DPU) for the quarter is 3.52 cents, 1.7 per
cent higher than CMT's forecast.

Gross revenue for Q2 was $125.6 million, an increase of $21.7 million
or 20.9 per cent. This was attributed to an increase in revenue of
$11.1 million from the three malls under CapitaRetail Singapore
(CRS), which contributed three months of revenue in Q2 2008, against
one month in Q2 2007.

CMT's other malls accounted for another $7.6 million increase in
revenue mainly due to new and renewal leases as well as higher
revenue from IMM Building, Plaza Singapura and Bugis Junction. Its
interest in Raffles City accounted for another $3.0 million.

CMT, which tracks gross turnover of tenants, said that tenants' sales
growth outpaced the increases in gross rent. Citing Plaza Singapura
as an example, it said that sales increased by 5.1 per cent in 2008
over 2007 to hit $97 million, based on a sample size of 143 tenants.
Gross rent increased by 2 per cent in the same period.

Still, one casualty appears to be John Little at Plaza Singapura. A
spokesman for John Little confirmed that it will close its Plaza
Singapura outlet. However, it is understood that the company will
take up a smaller space there for a possible new brand.