SINGAPORE (Apr 24): The manager of CapitaLand Mall Trust (CMT), reported CMT has achieved a net property income (NPI) of $140.1 million for the 1Q19 ended March, an increase of 11.5% from 1Q18.

Distributable income for 1Q19 was $106.3 million, 7.4% higher than 1Q18. DPU was 2.88 cents, up 3.6% year-on-year.

CapitaLand Mall Trust Management Limited (CMTML) says the increase in gross revenue was mainly due to the completion of the acquisition of the remaining 70% stake in Westgate on Nov 1, which contributed $19.1 million to gross revenue.

Bedok Mall and Tampines Mall also contributed to the increase in gross revenue. The increase was partially offset by lower gross revenue from Sembawang Shopping Centre, which was divested on June 18 2018.

Property operating expenses for 1Q19 increased 6.3% to $52.6 million, mainly due to the acquisition, partially offset by the divestment of Sembawang Shopping Centre.

Management fees at $12.4 million were 12.9% higher than 1Q18.

Finance costs for 1Q19 of S$27.7 million were 13.9% higher mainly due to interest on Infinity Mall Trust’s bank borrowings which was consolidated at CMT Group after the acquisition and term loans drawn down to part finance the acquisition. The increase was partially offset by the refinancing of EMTN of US$400 million in March 2018 at lower interest rates through loan drawdowns.

As at Mar 31, CMT’s average cost of debt was 3.2% and aggregate leverage was 34.4%.

In its outlook, CMTML expects Funan, opening in mid-2019 and about 90% leased, to contribute progressively to CMT’s earnings from 2H 2019.

Amid slowing down of the global and Singapore economies, the manager remains cautious in its outlook. The coming on stream of new retail space of about 1 million sf -- excluding Funan -- in Singapore this year is expected to intensify competition among shopping malls.

Units in CMT closed 2 cents lower at $2.32 on Tuesday.