CapitaLand Mall Trust (CMT) has overcome what it describes as a “soft” Singapore retail market to increase its profit and distribution.
A 3.7 per cent increase in distributable income to S$193.9 million (US$143 million) for the first half-year coincides with a second quarter distributable income of S$97.1 million, a 3.3 per cent increase over the $94 million for the same period last year.
“Despite a soft retail market, CMT continued to produce steady operational results in the first half,” says CMTML CEO Wilson Tan. “Backed by our portfolio of well-located shopping malls and extensive network of retailers, CMT had year-on-year increases of 3.6 and 2.3 per cent in shopper traffic and tenants’ sales per square foot respectively.
“As at June 30, portfolio occupancy remained high at 97.9 per cent.”
CMT’s Funan DigitaLife Mall, which closed from July 1, will undergo a three year redevelopment to become a lifestyle destination in the revitalised Civic and Cultural District, says Tan. Scheduled to be ready in the fourth quarter of 2019, the integrated development will include retail, office and serviced residences. The mall redevelopment is expected to achieve a return on investment of 6.5 per cent.
For the second quarter, CMT registered higher gross revenue and net property income (NPI) of 7.1 and 6 per cent respectively year-on-year, mainly through a contribution of $14.5 million to gross revenue from Bedok Mall, acquired on October 1, and higher rental revenue from IMM Building, Tampines Mall and Bukit Panjang Plaza after asset enhancement.
This was partially offset by the divestment of Rivervale Mall in December and lower gross revenue from Funan DigitaLife Mall.