Afternoon Highlight (25/01/13/16/714) CapitaMalls seeks to buy more malls

CapitaMalls seeks to buy more malls

It plans to focus on asset enhancement initiatives

Lim: ‘First, we will look at the sustainability of the rentals.’

KUALA LUMPUR: CapitaMalls Malaysia Trust (CMMT) is constantly on the lookout for new shopping mall acquisitions.

“We are always exploring, but we will inform the market only when we are ready,” said CapitaMalls Malaysia REIT Management Sdn Bhd (CMRM) chief executive officer Sharon Lim at a briefing yesterday.

Lim added that CMMT, which was managed by CMRM, would maintain its criteria in selecting prospective mall acquisitions.

“First, we will look at the sustainability of the rentals to determine if it is an income-producing mall or not,” she said.

The mall would ideally have a public catchment of between 400,000 and 500,000 people. Finally, CMMT's ability to apply its retail management skills in value adding towards the rental rates of the mall was also among its criteria for future mall acquisitions, Lim said.

There is no region CMMT is specifically looking at for new acquisitions.

“As you can see in our portfolio, we are a sub-urban, day-to-day necessity shopping mall,” said Lim.

CMMT currently has four shopping malls on its belt, namely, Gurney Plaza, Sungei Wang Plaza, The Mines and East Coast Mall.

Unlike luxury shopping malls, necessity shopping malls are not greatly affected by any economic situation, she explained.

With East Coast Mall as the latest addition to its portfolio, Lim said the trust would be focusing on implementing asset enhancement initiatives there for the next two years.

The Kuantan mall was added to CMMT's portfolio in November 2011.

“We are looking at embarking on some asset enhancement work, which will entail remixing, creating new space and the works itself. This would last over a period of about two years,” Lim noted.

The asset enhancement work at East Coast Mall would cost between RM50mil and RM60mil over the two-year period.

In late 2012, asset enhancement works at Gurney Plaza costing RM3.4mil was completed. Refurbishment works at Sungei Wang Plaza, meanwhile, are ongoing and expected to be completed by end-2013.

Yesterday, CMMT announced that it had recorded a 13.7% increase in a distributable income of RM37.30mil for the fourth quarter ended Dec 31, 2012 from a year ago, attributed to the full-quarter contribution from East Coast Mall along with the completion of the asset enhancement works at Gurney Plaza.

Net property income for the quarter grew 13% to RM49.5mil from RM43.8mil previously.

Revenue increased by 16.8% to RM73.78mil from RM63.14mil a year ago. CMMT's distribution per unit also increased by 6% to 2.11 sen from 1.99 sen in the previous year.

Lim said: “Our occupancy rate remained high at 98.5% as at end-December 2012, while rentals across CMMT's portfolio increased by a healthy 6.4%.”

For the full financial year ended Dec 31, 2012 (FY12), distributable income increased 26.1% to RM149.1mil from RM118.3mil in FY11. On the other hand, total distribution per unit for the full financial year stood at 8.44 sen, 7.2% higher than FY11.

CMRM chairman David Wong Chin Huat said: “Looking ahead, CMMT will continue to benefit from Malaysia's steady growth momentum. The global economy is starting to show signs of recovery, led by China. In line with this, the Government expects the economy to expand by between 4.5% and 5.5% in 2013, with retail sales forecast to grow by an estimated 6.0%.

“Such growth bodes well for a dedicated retail REIT such as CMMT,” he said in a statement.

Source : The Star

Date : 23 January 2013

Afternoon Highlight (25/01/13/16/714)