CMMT FY 2016 net property income increases 7.1% year-on-year
Driven by full year contribution from Tropicana City Mall and Tropicana City Office Tower, and better performance in Gurney Plaza and East Coast Mall
Kuala Lumpur, 24 January 2017 – CapitaLand Malaysia Mall REIT Management Sdn. Bhd. (CMRM), the manager of CapitaLand Malaysia Mall Trust (CMMT), is pleased to announce that CMMT recorded net property income (NPI) of RM242.5 million for the year from 1 January to 31 December 2016 (FY 2016), an increase of 7.1% over the RM226.4 million for FY 2015. The better performance in FY 2016 was mainly due to the full year contribution from Tropicana City Mall and Tropicana City Office Tower acquired in July 2015, and higher rental income from Gurney Plaza and East Coast Mall.
Distributable income for FY 2016 was RM171.1 million, an increase of 5.1% over the RM162.8 million for FY 2015. For the period 1 October to 31 December 2016 (4Q 2016), distributable income was RM42.7 million, 0.8% higher than the corresponding period last year (4Q 2015).
Distribution per unit (DPU) for 4Q 2016 was 2.10 sen, bringing the total DPU for FY 2016 to 8.43 sen. The lower DPU in FY 2016 was mainly due to lower contribution from Sungei Wang Plaza, higher finance costs and the effects of an enlarged unitholding base following the private placement to fund the acquisition of Tropicana City Mall and Tropicana City Office Tower. Based on CMMT’s closing price of RM1.62 per unit on 23 January 2017, the FY 2016 DPU translates to an annualised distribution yield of 5.2%. Unitholders can expect to receive the total DPU of 4.23 sen per unit for the period from 1 July to 31 December 2016 on 28 February 2017. The book closure date is 10 February 2017.
As part of proactive capital management, CMMT issued RM300.0 million of three-year Medium Term Notes (MTN) at a lower coupon rate of approximately 4.3% per annum to redeem the outstanding MTN in December 2016.
Mr David Wong, Chairman of CMRM, said: “Malaysia’s economy in 2016 was expected to grow by 4.0% to 4.5%1, driven mainly by domestic demand. Looking ahead, we expect consumer and business sentiment to remain cautious in 2017, due to concerns about rising costs of living and a soft outlook for global economic growth. Despite the challenging operating environment, we remain optimistic that CMMT’s portfolio of quality malls, which are strategically located in key urban centres and largely focused on necessity shopping, will be resilient and continue to deliver steady results.”
Ms Low Peck Chen, CEO of CMRM, said: “FY 2016 saw CMMT reaping the full-year contribution of our acquisition of Tropicana City Mall and Tropicana City Office Tower, as well as the fruits of our proactive retail management initiatives. Following asset enhancement and efforts to refresh the tenant remix, Gurney Plaza and East Coast Mall registered NPI growth of 10.0% and 4.7% respectively, due to higher rental rates achieved from new and renewed leases.
“We expect the completion of asset enhancement initiatives at Gurney Plaza and Tropicana City Mall in 4Q 2016 to contribute positively to our performance going forward. The improvements at Gurney Plaza included unit reconfiguration and conversion of a common walkway into leasable space. At Tropicana City Mall, we further strengthened the Level 2 edutainment zone with the addition of RockStar Gym, a fitness centre for children and teenagers; and MusicZON, a music school.
“In 2016, we extended our rewards programme CapitaStar – previously available only in Gurney Plaza – to Tropicana City Mall, The Mines and East Coast Mall. Our malls also organised various unique marketing activities to further drive traffic and build shopper loyalty. We will continue to leverage on CapitaStar and organise attractive marketing activities to deepen our shopper engagement, in addition to ongoing efforts to optimise our retail mix and identify asset enhancement opportunities. These will help ensure that our malls remain relevant and attractive to shoppers and retailers in the current challenging retail landscape.”
Summary of CMMT’s results
Gross revenue (RM'000)
Net Property income (RM’000)
Distributable income (RM’000)
For the period
Annualised distribution yield
N.M - Not meaningful
1 Source: Bank Negara Malaysia, 11 November 2016
2 Based on closing price of RM1.62 per unit on 23 January 2017.
3 Based on closing price of RM1.42 per unit on 19 January 2016.