CMMT...CapitaMalls

CapitaMalls Malaysia Trust
Based on the institutional IPO price of RM1, the trust will have a market capitalisation of RM1.35 billion upon listing — making it the second-largest REIT to be listed on the local bourse by market capitalisation. It will also be the second largest in terms of total assets, after Sunway REIT.

CMMT is marketed as the largest, pure-play shopping mall REIT in the country. Its initial portfolio will consist of three shopping malls — Gurney Plaza in Penang, 205 strata parcels within Sungei Wang Plaza (which is about 61.9% of the mall’s retail floor area plus car park) in the heart of Kuala Lumpur and The Mines in Selangor — valued at a collective RM2.13 billion with net lettable area (NLA) totalling almost 1.88 million square feet.

The trust is sponsored by CapitaMalls Asia, the leading integrated shopping mall owner, developer and manager in the region and a subsidiary of Singapore-listed CapitaLand. CapitaMalls Asia will retain a 41.7% stake in CMMT after the IPO. Two cornerstone investors, the Employees Provident Fund and Great Eastern Life Assurance (Malaysia) Bhd, will have a collective 6.7% holding in the REIT.

CMMT is given a right of first refusal for retail properties located in Malaysia that CapitaMalls Asia may identify and target for acquisition in the future. As the first order of business, the trust will be evaluating the viability of acquiring a nine-storey retail extension block adjoining Gurney Plaza, valued at some RM215 million. The acquisition would add 135,000 sq ft of net lettable area to CMMT’s existing portfolio.

CMMT forecasts total distributable income of RM64.7 million, equivalent to roughly 4.78 sen per unit, for the eight-month period ending December 2010 and RM101.3 million or 7.44 sen per unit in 2011.

The trust intends to distribute all of its income in 2010-2011 and at least 90% of annual profits thereafter. This would translate into annualised yields of some 7.2% and 7.4% based on the IPO price of RM1 per unit.