CapitaLand’s Mall Strategy: Divestment, and Earnings Growth
CapitaLand Malaysia Trust (CLMT) sees positive rental reversions and improved performance in ex-Klang Valley malls. In FY23, rental reversion reached 7%, with ex-Klang Valley malls showing a robust 9.9% growth driven by refreshed tenant mix.
CapitaLand – Challenges
However, Klang Valley malls faced challenges, with negative growth recorded. CLMT plans to divest struggling malls, though finding buyers may be challenging.
Expectations for FY24E include a 10.8% EPU growth, driven by contributions from Queensbay Mall. Management aims to enhance portfolio with industrial/logistics assets and divest low-yielding ones. Despite challenges, CLMT maintains a hold recommendation with revised earnings forecasts and increased target price.
Expect earnings growth to resume in FY24E
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“We expect +10.8% EPU growth in FY24E, mainly from full-year contribution of QBM. This assumes (1) positive rental reversions of 3%, and (2) stable occupancy rates at Gurney Plaza, QBM and East Coast Mall (at 99%).
Management’s portfolio strategy is to explore yield accretive industrial/logistics assets and look to divest its low-yielding assets as part of its capital recycling effort,” says Maybank.
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