CapitaLand Mall Trust (SGX: C38U), or CMT, is a REIT that focuses on investing in income producing real estate, which is used for retail purposes. It currently has 16 properties, which are located in the suburban areas and downtown core of Singapore. Example of properties include Tampines Mall, Junction 8, IMM Building, Plaza Singapura and Bugis Junction.
In this article, let’s look at two things to know about the REIT right now: its latest financial performance and the valuation.
Here is a table showing important numbers from CapitaLand Mall Trust’s financial performance for the first quarter of financial year ending 31 December 2018.
Source: CapitaLand Mall Trust Results Presentation
The year-on-year improvement in gross revenue and net property income was due to higher occupancy for IMM Building, Clarke Quay, The Atrium@Orchard and Plaza Singapura, as well as higher car park income.
As at 31 March 2018, the retail REIT clocked in a gearing ratio of 33.5% whilst its occupancy rate stood at 98.9%.
In all, CapitaLand Mall Trust had a good quarter with stronger metrics across the board.
There are two useful valuation metrics when assessing REITs. They are the price-to-book (PB) ratio, and the distribution yield.
The table below shows CapitaLand Mall Trust’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 42 REITs that are in Singapore’s stock market.
Source: Stock Facts on SGX.com; data as of 18 May 2018
We can see that CapitaLand Mall Trust’s valuation is higher than the market average due to its low distribution yield and high PB ratio.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn't own shares in any companies mentioned. Motley Fool has a recommendation for CapitaLand Mall Trust.