Clark Quay acquisition boosts CMT's revenue to S$154mln

Higher rental rates and renewed leases boost CapitaMall Trust's coffers by 10.7% YoY for 1Q11.

Net property income of S$105.7m also rose 8.2% YoY and 4.1% QoQ.

In a statement, CMT said its DPU stands at 2.29 S-cents for the quarter, 3.0% higher than the DPU of 2.23 cents for the same period in 2010.

Following its past practice, CMT retained S$9.5m of the taxable income available for distribution, which is typically released to unitholders at the end of the FY.

The retention is a provision to meet an expected increase in refinancing costs in subsequent quarters.

CMT benefited from the spike in tourist arrivals for 1Q with the increase foot traffic to Clark Quay and its other downtown malls.

As of March 31, CMT's portfolio occupancy stands at 99.2% compared to 99.3% in the last quarter.

While occupancy was slightly dented by the nonrenewal of tenants at Clarke Quay, IMM Building and Lot One, the trust still enjoyed a 7.5% boost in rental renewal rates in 1Q over preceding rental rates.

OCBC noted, however, that the topline of Atrium@Orchard dipped 8.4% QoQ, and said it is "probably affected" by the asset enhancements works which commenced in January 2011 and slated to be completed in 3Q12.

The bank has maintained its Buy recommendation for CMT, taking into consideration the strong leasing interest for JCube, the trust's new mall slated for opening in 1Q12.

"CMT's portfolio is well-positioned to benefit from anticipated growth in domestic retail amidst improved economic conditions; a stronger-than-expected GDP increase of 8.5% in 1Q11.

The expected increase in visitor arrivals in 2011, on the back of STB's forecast of 12m-13m in 2011 (up from 11.6m in 2010), is also likely to boost retail demand going forward," OCBC said.