CapitaMall Trust

[Musicwhiz]

Mar 1, 2011
CapitaMall Trust to buy Iluma mall

CAPITAMALL Trust (CMT) is buying the Iluma mall near Bugis MRT station for $295 million, it announced yesterday.

The firm already manages the Bugis Junction mall across the street, so the acquisition will allow it to create some synergies.

Mr Simon Ho, chief executive of the trust's manager, CapitaMall Trust Management (CMTML), said: 'The two malls are already connected by an overhead bridge and we see scope to create an enlarged and seamless shopping destination that will appeal to locals and tourists.'

Bugis Junction attracts more than 3.2 million shoppers a month, while the area itself is an increasingly popular zone for entertainment and the arts.

The integration with Iluma will create a combined shopping space of more than 606,000 sq ft, about the size of Ion Orchard, added Mr Ho.

Iluma had an occupancy rate of 83.7 per cent as of Feb 1, with 129 tenants.

CMTML chairman James Koh said CMT's downtown malls have benefited from the strong increase in tourist arrivals, and that adding Iluma will allow the firm to further tap this growth.

CMT said Iluma will also allow it to diversify its portfolio's trade mix.

The mall has a strong entertainment flavour with the Filmgarde cineplex, K-Suites and themed food and beverage outlets, so its acquisition should give CMT a leg-up in the lifestyle and entertainment market.

CMT said it is confident that Iluma's occupancy can match the 100 per cent achieved at Bugis Junction, and that its property yield can also be boosted in line with the trust's other malls.

The price works out to about $1,593 per sq ft of net lettable area. Once legal fees and due diligence expenses are added, the total purchase cost inches up to $299 million, or $1,614 per sq ft.

The deal will take CMT's portfolio of malls to 16 - including Plaza Singapura, Junction 8 and Tampines Mall - with an asset size of $8.4 billion.

It will finance the acquisition through internal funds.

ESTHER TEO

[mikh]

CMT does not seem to publish AGM minutes. For interested parties who were unable to attend, let me share a few points brought up by unit-holders (what I manage to capture):

1. Good one by "Bobby" (Bobby J of the 25 Dec BT article? http://www.valuebuddies.com/thread-422.html ). Asked why CMT's large number of malls compared with Frasers CT does not give it cost advantages such as economies of scale (something like 8 vs 4 malls). Answer alluded to CMT's malls being a spread of different types and therefore not comparable. Doesn't sound convincing to me.

2. Mano (Subani?) on EGM to re-appoint CMA as Master Property Mgr for another 10 years; asked about efforts made to compare performances and cost vs market. Answer given by attending “Independent” Advisor INGs was that it is comparable to that of others in Singapore. Shareholders asked about comparison with overseas benchmarks! BOO to the Independent Advisor, poor job!

3. Asset Manager and Property Manager all charging fees, is it too much and who does what? Is 2%+2%+0.5% rate to Property Mgr fair? Liew ML tried to defend that cheap does not mean best, but in the end conceded that track record is a reference.

4. What are CMT’s plans for its China Malls? Answer: May be divested as this would be more in line with CMT’s local vision. Nevertheless, currently providing good income.

5. Are Independent Directors truly able to hold their own since so few of them? The Independent Director said yes. Of course

Answers were of course all “given”, but a few got lost “in discussion”. Points were really well put up by Bobby and Mano.

[Drizzt]

mikh, what do you think of capitamall?

[mikh]

That’s a very broad question Drizzt. Let me try to answer.

Positives: I think it has done very well in its asset enhancement efforts (but there are only so many atriums you can convert). It also has a spread of malls throughout Singapore and continues to grow its footprint. I get vibes that they run their malls well and you can see that the traffic is all quite good. JCube, Atrium and Iluma should be nicely accretive. So far I generally like what they had been doing. Their malls mean they do have clout with multi-site retailers.
Clouds: The retail situation in Singapore keeps being upgraded. Players like Jurong Point, Vivo and Nex are significant. Perrenial is competition. Things are getting expensive for shoppers as well although a lot of people spending lots now.
Relationship to Capitaland and Management: It’s a large team and the parent can give lots of support, or can suck its blood. I don’t think there’s a black or white answer. That’s why its important that unit holders like Mano and Bobby asked those questions and deter them doing as they please.
I have not seen PhuaSG in person but he seems to have big shoes for SimonHo to fill. The AGM was slightly negative for me viz my earlier comments.
Numbers: Not great yield but decent and offers stability. Will let others better at this crunch them.

That’s my 4 cents. Comments welcomed.

[Musicwhiz]

Raising more money?

Business Times - 01 Nov 2011

CMT to raise up to $300m

By UMA SHANKARI

CAPITAMALL Trust (CMT) is looking to raise up to $300 million through a private placement for asset enhancement works and to meet its capital expenditure needs, the retail trust said yesterday.

The $300 million placement includes an upsize option of about $50 million.

CMT, which is a unit of Singapore's largest property group CapitaLand, will issue up to 167.6 million new units at $1.79-1.85 per unit.

The net proceeds from the private placement will amount to about $245.7 million (assuming the upsize option is not exercised) and $294.9 million (assuming the upsize option is fully exercised), CMT said.

A large chunk - some 90 per cent to 95 per cent - of the net proceeds from the placement exercise will be used to finance capital expenditure and asset enhancement initiatives, including those at on-going projects such as JCube, The Atrium@Orchard and Iluma.

The remaining 5 per cent to 10 per cent of the proceeds will be used for general corporate and working capital purposes.

The offer of new units under the private placement will be made to institutional and other investors.

The new units are expected to be issued on Nov 10.

CMT shed 1.5 cents to $1.875 yesterday before trading was halted at mid-day.

[arthur]

Hopefully CMT mgt will drive a good bargain if acquisition through other sources than thru parent Capitaland.
Didin't we hear about rumours of Ion Orchard possible acqusition in the past?

Hmmm...

[Nick]

I believe CMT's Manager/Sponsor (CMA) owns 50% of Ion Orchard so I guess they might choose to recycle capital when its stabilized (yield accretive) and if CMA needs the money.

(Not Vested in either)

[Musicwhiz]

Business Times - 02 Nov 2011

CMT units fall on news of placement

By UMA SHANKARI

CAPITAMALL Trust (CMT) units lost as much as 5.3 per cent yesterday after the retail trust said it raised gross proceeds of about $250 million through a private placement.

CMT placed out 139.7 million new units at $1.79 each to fund upgrading works and investments in several of its shopping malls.

Net proceeds from the placement amount to about $245.7 million.

The new units will be issued to over 30 existing and new institutional investors from Asia, the United States and Europe.

The proceeds from the private placement will provide CMT with greater financial capacity to ramp up its organic growth through asset enhancement initiatives, said Simon Ho, chief executive of CMT's manager.

'These initiatives - which include those already announced for JCube, The Atrium@Or- chard and Iluma - are expected to boost CMT's net property income for the next few years,' Mr Ho said.

'At the same time, the proceeds from the exercise will reduce CMT's gearing and provide greater financial flexibility in view of the uncertain economic outlook.'

CIMB Research said in a new report that the private placement will help to strengthen CMT's balance sheet and raise equity at a time when its share price has held up at 1.2 times price-to-book value.

'This should quash near-term cash-call concerns while giving it the flexibility to drive growth through asset enhancement initiatives,' said CIMB's analysts, who issued an 'outperform' call on CMT with a price target of $1.93.

DMG & Partners Securities analyst Goh Han Peng similarly said that the new funds will come in handy for CMT to execute its asset enhancement initiatives. DMG maintained its 'neutral' call and target price of $1.94 on the stock.

Analysts were also positive on CMT's move to reduce its leverage marginally. The private placement is expected to reduce the trust's aggregate leverage from 40.1 per cent to 39 per cent.

'Moody's views the equity issuance positively as it will reinforce CMT's commitment to maintain its leverage below its targeted 40 per cent,' said Alvin Tan, Moody's Investors Service's lead analyst for CMT.

The ratings agency said it sees no impact on CMT's 'A2' corporate family rating or its 'A3' senior unsecured debt rating from its private placement.

But the market reacted negatively to the placement, and CMT units fell to as low as $1.775 before ending 8.5 cents down at $1.79 yesterday. Not helping the counter was the broad market retreat, which saw the Straits Times Index fall 2.33 per cent.

CMT is Singapore's largest largest real estate investment trust (Reit) and holds assets worth $8.6 billion.

[WolfT]

SINGAPORE, May 3 (Reuters) - CapitaMall Trust (CMT) ,

Singapore's biggest real estate investment trust by assets, said on Thursday it will make a one-time gain of S$83.8 million ($67.54 million) from the sale of one of its properties in the city-state.
The property, called Hougang Plaza, will be sold to Oxley Bloom Pte Ltd for S$119.1 million or more than three times the mall's S$34 million valuation, said CMT, whose manager is a unit of Southeast Asia's biggest developer CapitaLand Ltd.
"CMT will realise a net gain of approximately S$83.8 million from the sale of Hougang Plaza after taking into account the divestment fee and other divestment related expenses," it added.
CMT is listed in both Singapore and Hong Kong. ($1 = 1.2407 Singapore dollars) (Reporting by Kevin Lim)


Seriously...Is Hougang Plaza worth so much?

[swakoo]

Seriously...Is Hougang Plaza worth so much?

6 years ago,

Hougang Plaza Granted Outline Planning Permission to Increase Plot Ratio from 1.4 to 3.0

We are pleased to announce that the Urban Redevelopment Authority has granted CMT an Outline Planning Permission to increase the plot ratio of Hougang Plaza from 1.4 to 3.0 for full residential development or mixed development. The current Gross Floor Area (“GFA”) of approximately 79,648 square feet (“sq ft”) will be increased to approximately 171,141 sq ft. In view of this approval, CMTML will re-evaluate the proposed asset enhancement plans for Hougang Plaza, so as to maximise returns to Unitholders.

http://capitamall.listedcompany.com/news...elease.pdf

Recent success of Bedok Residences, Punggol Watertown and Katong Regency must have helped.