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ALP REIT INVESTMENT CLUB
CapitaLand mall trust (C38U)
(1November2015) close: S$1.98
12M-Target price: S$2.20
1.) Type of Reit: Retail real estate industry
2.) Number of property in the portfolio: CMT’s 16 quality shopping malls.
3.) Top 5 properties that generates the highest revenue (Decreasing order): Plaza Singapura (13.5%), Bugis Junction (12.0%), IMM Building (11.6%), Tampines Mall (11.4%) and Junction 8 (8.7%).
4.) Challenges: The labour market in Singapore is expected to remain tight with a low unemployment rate. The competition from e-commerce and a stringent foreign worker policy could weigh on some retailers’ expansion plans and result in the possible consolidation of their businesses.
5.) Strengths: CapitaLand Mall Trust (CMT) has made several initiatives to improve foot traffic in the retail sector. They have rolled out free Wi-Fi in seven malls and implemented several digital innovations to enhance interaction between our malls and shoppers, such as the social media walls in Westgate and JCube. As at 31 December 2014, CAPITASTAR – our card-less loyalty programme which enables shoppers to enjoy benefits over and above credit card and in-store rewards – had over 654,000 members. CAPITASTAR is a card-less rewards programme that rewards shoppers with STAR$® when they make purchases at participating outlets across 17 CapitaMalls.
These STAR$® are tracked by our rewards programme automatically when receipts are scanned / uploaded through our touch points.
The STAR$® accumulated in this programme can be used to exchange for CapitaVouchers or other promotion gifts from time to time.
6.) Significant events: On 23 January 2014, a consortium exercised its options to purchase Westgate Tower for a total consideration of approximately S$579.4 million (CMT’s 30.00% share amounted to S$173.8 million). Westgate Tower obtained the temporary occupation permit on 9 October 2014 and CMT registered a net gain of approximately S$47.5 million.
8.) Recommendation: Buy. CMT is the first and largest real estate investment trust by market capitalisation in Singapore. Moreover CMT parent company, CapitaLand which also partially owned by Temasek Holding. Hence, CMT is suitable for dividend portfolio due to its stability.
COMPILED BY: Chu Cehan
DISCLAMER: Readers should not rely solely on information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.
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