Thursday, January 10, 2013

Check out CapitaMalls Asia's top company jewels

It could juice $15m from newbie Star Vista.

According to Maybank Kim Eng, CapitaMalls Asia is one of the best proxies to gain exposure to the consumer markets in Asia and China. Currently with 59 malls across China, CMA will be a major beneficiary as private consumption grows.

It is also not resting on its laurels within Singapore, where both Westgate and Bedok Mall are scheduled to open by 2013.

CMA’s tenants continue to enjoy fairly steady sales. In Singapore, shopper traffic may have fallen marginally by 0.8% in 9M12, but tenant sales still edged up by 1.7% on a psf basis.

Here's more from Maybank Kim Eng:

Tenant sales in China grew by 10.7% in 9M12, but outside of the Tier 1 cities, tenants enjoyed even more robust growth of 14.2%, underpinning CMA’s same-mall 9M12 NPI growth of 18.4% in China.

Flurry of mall openings in 3Q12. CMA opened six new malls in the quarter, namely in Beijing, Rizhao, Wuhan and Harbin, as well as Raffles City Ningbo and Raffles City Chengdu.

In addition, the Star Vista in Singapore opened in September, with close to 90% of the NLA already committed. On a stabilized basis, the Star Vista is expected to contribute SGD15m to the PATMI annually.

Potential capital recycling in 2013? With a cash position of ~SGD600m and net gearing of 0.3x, CMA remains in strong financial health. Nonetheless, we see some monetization possibilities in 2013.

For example, Queensbay Mall (last valued at SGD292m) may potentially be sold to CapitaMall Malaysia Trust. CMA’s 50% stake in ION Orchard, valued at over SGD1.4b, could possibly be acquired by CapitaMall Trust. The timing of such divestments will depend on whether acquisition opportunities arise for CMA to redeploy its capital.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

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