CapitaLand Mall Trust's AEI positives have been priced in with limited catalysts in sight: CGS-CIMB

CapitaLand Mall Trust's AEI positives have been priced in with limited catalysts in sight: CGS-CIMB

Michelle Zhu
01/10/18, 12:59 pm

SINGAPORE (Oct 1): CGS-CIMB Research is maintaining “hold” on CapitaLand Mall Trust (CMT) with an unchanged target price of $2.21, as it sees limited catalysts from the stock after factoring in expected contributions from the new Funan DigitaLife Mall, which is expected to open in 2Q19.

The research house is nonetheless positive on the trust’s prospects with Funan after attending the mall’s topping out ceremony last week.

To recap, Funan has been closed since 3Q16 for construction works to transform it into a “creative hub”. The asset enhancement initiative (AEI) project recently celebrated its structural completion ahead of schedule, and has achieved 72% of overall construction to date.

In a report last Friday, lead analyst Eing Kar Mei highlights the upcoming mall as a “smart building which focuses on work, live and play”, after CMT’s management at the event showcased a range of digital innovations to be found at Funan.

“Innovations which could beef up retail performance include a smart interactive directory that uses facial recognition to provide shoppers with customised recommendations, video analytics that study shopper traffic and crowd density, as well as a merchant dashboard that enables retailers to tap consumer insights. As for its serviced residence, tenants can expect an all-in app which allows social networking, room bookings and also serves as a mobile key,” notes Eing.

She also highlights Funan as the first of its kind to deploy automated guided vehicles to provide its customers a hands-free shopping experience, as well as the first to utlise a robotic arm for its 24-horu drive-through click-and-collect service.

“All in, we like the concept of Funan and believe that its differentiated offerings which are absent in other conventional offices and malls will help to attract tenants… To date, leases signed and in advanced negotiations for Funan’s retail and office components have reached 70% and 60%, respectively,” concludes the analyst.

Units of CMT were trading 1 cent higher at $2.23, or 1.14 times Dec-19F book value, prior to the midday trading break.

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