CapitaLand, CapitaMalls Asia and CapitaMall Trust sign option to sell Westgate Tower for $579.4 mil
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Showing posts with label CapitaMall Trust. Show all posts
Showing posts with label CapitaMall Trust. Show all posts
Wednesday, January 8, 2014
Thursday, March 21, 2013
Retailers say REITs are pushing up rental costs
Retailers say REITs are pushing up rental costs
By Linette Lim | Posted: 20 March 2013 2304 hrs
SINGAPORE : Real estate investment trusts (REITs) have become an investment darling in Singapore giving investors attractive returns.
But for retailers, REITs are causing them to cough out more in rents.
This is because REITs act mainly to boost returns for their shareholders.
President of the Singapore Retailers Association (SRA), Jannie Chan, says the higher rentals are adding to the woes in the retail sector which include a labour crunch and shortage of parking space.
Ms Chan says: "We've got the REITs killing us, we've got the labour killing us, and we've got no shopping (centre) car parks, so where are we going? So I think this is really (the result) of the government policies."
In Singapore, up to 75 percent of a retailer's costs are fixed costs such as rents and wages.
And over the years, the Singapore Retailers Association says rents, as a proportion of fixed costs, have risen relative to wages.
SRA says mall landlords like REIT managers raise rents by 5 to 10 percent every three years.
Ms Chan says: "(The make up of ) the fixed costs for retailers have shifted from 50 percent rental and 50 percent staff costs to 50 percent rental and 25 percent staff costs. The leases are short-term - it's renewed every three years. Each time there is a renewal, (the retailer or tenant) has to pay between 5 and 10 percent more."
She adds: "If your business is surviving, or doing well, you could afford that raise. But if not, you would then have to move, which means that the investments you have made over the last three years - the renovation, the staff - you may have to pull out. That becomes quite damaging, especially when you have been there for a long time and (are) there for the long haul within the shopping centre. So I think the REITs should be more mindful. If you have clients that over a period have been supportive of you, but during a certain period when there's a downturn in the economy, they could make adjustments and be more reasonable and more compassionate."
Speaking at the World Retail Congress, a retail industry event, which was attended by over 500 retail professionals, Ms Chan suggests that REITs could moderate their shareholders' expectations of yields.
And this can then translate to more reasonable increases in rents.
She says: "Perhaps there could be a policy to set the REITs off between 4 and 5 percent, instead of 7 to 8 percent. At the end of the day, it's what sort of returns (being delivered) to the investor. And at a time like this, when you've got very low interest rates, that seems to be compatible and reasonable."
Other industry experts say the problems that Singapore retailers face are not unique.
Ian Mcgarrigle, Chairman, World Retail Congress, says: "For Singapore retailers, the key issue seems to be the high fixed costs that they have to operate with - the rent that they are paying for space and the high cost of labour, and also the increasing scarcity of labour. They're not issues that surprise me - we hear them to greater or lesser degree around the world."
CapitaMall Trust (CMT) is one of the biggest mall landlords in Singapore.
A spokesperson from CapitaMall Trust Management says it is an industry norm to have rental reversions every three years, regardless of a REIT or non-REIT regime.
Some experts believe higher rents are justified as these REIT managers upgrade mall properties to improve its business mix and customer flow.
In the 2012 financial year, CMT revealed that it raised rents across its portfolio of malls by an average of 6 percent from preceding rental rates, typically committed three years ago.
"At an average of 2 percent a year, the change in rental is lower than inflation in Singapore," said the CapitaMall Trust Management Limited spokesperson.
The current inflation rate is around 4 percent.
The spokesperson added that the trust manager's approach is to partner its retailers to drive shopper traffic to their malls and increase their sales.
"For example, last year, we held 13 Biz+ seminars, workshops and classes in areas such as customer relationship management and visual merchandising. These initiatives help retailers to increase business in our malls," said the spokesperson.
Another major REIT manager, Frasers Centrepoint Trust management, was not available for comment.
- CNA/ch
- wong chee tat :)
By Linette Lim | Posted: 20 March 2013 2304 hrs
SINGAPORE : Real estate investment trusts (REITs) have become an investment darling in Singapore giving investors attractive returns.
But for retailers, REITs are causing them to cough out more in rents.
This is because REITs act mainly to boost returns for their shareholders.
President of the Singapore Retailers Association (SRA), Jannie Chan, says the higher rentals are adding to the woes in the retail sector which include a labour crunch and shortage of parking space.
Ms Chan says: "We've got the REITs killing us, we've got the labour killing us, and we've got no shopping (centre) car parks, so where are we going? So I think this is really (the result) of the government policies."
In Singapore, up to 75 percent of a retailer's costs are fixed costs such as rents and wages.
And over the years, the Singapore Retailers Association says rents, as a proportion of fixed costs, have risen relative to wages.
SRA says mall landlords like REIT managers raise rents by 5 to 10 percent every three years.
Ms Chan says: "(The make up of ) the fixed costs for retailers have shifted from 50 percent rental and 50 percent staff costs to 50 percent rental and 25 percent staff costs. The leases are short-term - it's renewed every three years. Each time there is a renewal, (the retailer or tenant) has to pay between 5 and 10 percent more."
She adds: "If your business is surviving, or doing well, you could afford that raise. But if not, you would then have to move, which means that the investments you have made over the last three years - the renovation, the staff - you may have to pull out. That becomes quite damaging, especially when you have been there for a long time and (are) there for the long haul within the shopping centre. So I think the REITs should be more mindful. If you have clients that over a period have been supportive of you, but during a certain period when there's a downturn in the economy, they could make adjustments and be more reasonable and more compassionate."
Speaking at the World Retail Congress, a retail industry event, which was attended by over 500 retail professionals, Ms Chan suggests that REITs could moderate their shareholders' expectations of yields.
And this can then translate to more reasonable increases in rents.
She says: "Perhaps there could be a policy to set the REITs off between 4 and 5 percent, instead of 7 to 8 percent. At the end of the day, it's what sort of returns (being delivered) to the investor. And at a time like this, when you've got very low interest rates, that seems to be compatible and reasonable."
Other industry experts say the problems that Singapore retailers face are not unique.
Ian Mcgarrigle, Chairman, World Retail Congress, says: "For Singapore retailers, the key issue seems to be the high fixed costs that they have to operate with - the rent that they are paying for space and the high cost of labour, and also the increasing scarcity of labour. They're not issues that surprise me - we hear them to greater or lesser degree around the world."
CapitaMall Trust (CMT) is one of the biggest mall landlords in Singapore.
A spokesperson from CapitaMall Trust Management says it is an industry norm to have rental reversions every three years, regardless of a REIT or non-REIT regime.
Some experts believe higher rents are justified as these REIT managers upgrade mall properties to improve its business mix and customer flow.
In the 2012 financial year, CMT revealed that it raised rents across its portfolio of malls by an average of 6 percent from preceding rental rates, typically committed three years ago.
"At an average of 2 percent a year, the change in rental is lower than inflation in Singapore," said the CapitaMall Trust Management Limited spokesperson.
The current inflation rate is around 4 percent.
The spokesperson added that the trust manager's approach is to partner its retailers to drive shopper traffic to their malls and increase their sales.
"For example, last year, we held 13 Biz+ seminars, workshops and classes in areas such as customer relationship management and visual merchandising. These initiatives help retailers to increase business in our malls," said the spokesperson.
Another major REIT manager, Frasers Centrepoint Trust management, was not available for comment.
- CNA/ch
- wong chee tat :)
Thursday, January 24, 2013
CapitaMall Trust reports 2.6% rise in Q4 DPU
CapitaMall Trust reports 2.6% rise in Q4 DPU
By Kristie Neo | Posted: 18 January 2013 1821 hrs
SINGAPORE : CapitaMall Trust Management on Friday said its distribution per unit (DPU) was up 2.6 per cent to 2.36 cents in the fourth quarter of 2012.
For the full year, unitholders will receive a total of 9.46 cents for the fiscal year, compared to 9.37 cents in 2011.
CapitaMall Trust Management said that for the fourth quarter of 2012, its distributable income grew 5.7 per cent to over S$79 million.
For the full year, distributable income grew 5.1 per cent to more than S$316 million.
Gross revenue rose 10 per cent to S$173.67 million, while net property income increased 14.3 per cent to S$112.91 million during the same period.
The management attributed this to completed asset upgrades in malls like the "Atrium@Orchard", JCube and Bugis+.
Ongoing enhancements in IMM are also expected to contribute positively this year.
The management added that its new Westgate shopping mall at Jurong Gateway is on track to be completed later this year.
Moving forward, the management said that it will look at some of its older malls for possible upgrading opportunities.
Wilson Tan, CEO of CapitaMall Trust Management Limited, said: "This is something important because last year we (were) able to churn out three new asset enhancement exercises, and this is really going to bring us great profits...for 2013, so asset enhancement is an exercise we will continue to do."
- CNA/ms
- wong chee tat :)
By Kristie Neo | Posted: 18 January 2013 1821 hrs
SINGAPORE : CapitaMall Trust Management on Friday said its distribution per unit (DPU) was up 2.6 per cent to 2.36 cents in the fourth quarter of 2012.
For the full year, unitholders will receive a total of 9.46 cents for the fiscal year, compared to 9.37 cents in 2011.
CapitaMall Trust Management said that for the fourth quarter of 2012, its distributable income grew 5.7 per cent to over S$79 million.
For the full year, distributable income grew 5.1 per cent to more than S$316 million.
Gross revenue rose 10 per cent to S$173.67 million, while net property income increased 14.3 per cent to S$112.91 million during the same period.
The management attributed this to completed asset upgrades in malls like the "Atrium@Orchard", JCube and Bugis+.
Ongoing enhancements in IMM are also expected to contribute positively this year.
The management added that its new Westgate shopping mall at Jurong Gateway is on track to be completed later this year.
Moving forward, the management said that it will look at some of its older malls for possible upgrading opportunities.
Wilson Tan, CEO of CapitaMall Trust Management Limited, said: "This is something important because last year we (were) able to churn out three new asset enhancement exercises, and this is really going to bring us great profits...for 2013, so asset enhancement is an exercise we will continue to do."
- CNA/ms
- wong chee tat :)
Tuesday, October 30, 2012
S'pore REIT market on the rise, but risks remain
S'pore REIT market on the rise, but risks remain
By Linette Lim | Posted: 29 October 2012 2150 hrs
SINGAPORE: The Singapore real estate investment trust (REIT) market is up about 40 per cent this year -- double the returns in major REIT markets like the US and Japan.
While returns and yield spreads on Singapore REITs may be the best in the world, some analysts said the market could become over-invested
In 2002, CapitaMall Trust became the first Singapore-listed REIT. A decade on, there are over 20 REITs across the commercial, industrial, hotel and healthcare property sectors.
Low interest rates on bank deposits have helped to keep investor interest high in REITs and other stapled securities.
Industrial REITs for example pay dividends of up to eight per cent -- more than the five to six per cent offered by blue chip stocks.
Gabriel Yap, executive chairman of GCP Global, said: "The REITs are trading at about 20 times the PE (price to earnings ratio) as compared to the real estate developers at only 12 times. Because it's a REIT structure that pays stable dividends, the valuations are much higher."
Some analysts said REITs may be an over-invested asset class.
Excluding other stapled securities and business trusts, such as Hutchison Port Holdings Trust, the REIT market in Singapore has a market capitalisation of around US$38 billion. That is up more than three times from its post-Lehman crisis bottom in 2008.
Terence Wong, executive director at DMG & Partners Research, said: "There is a risk of the sector being over-owned, since everybody wants a piece of the pie right now. We've seen that in 2006 and 2007, where REITs were seen very much as a growth stock. And I think that's the danger.
"Right now, we're seeing the same thing, with the REITs rising about 40 per cent so far this year. When complacency sets in, if the party ends, I think a lot of people will get hurt."
From 2004 to 2007, many REITs enjoyed high valuations due to the stock market boom. REIT managers borrowed money to acquire new properties, increasing their gearing.
But the financial crisis struck in 2008, and many REIT managers with over-geared balance sheets were forced to raise cash by issuing more equity, thereby diluting the value of the stock.
In a little more than six months, from May to December 2008, the market capitalisation of REITs had fallen 2.6 times.
-CNA/ac
- wong chee tat :)
By Linette Lim | Posted: 29 October 2012 2150 hrs
SINGAPORE: The Singapore real estate investment trust (REIT) market is up about 40 per cent this year -- double the returns in major REIT markets like the US and Japan.
While returns and yield spreads on Singapore REITs may be the best in the world, some analysts said the market could become over-invested
In 2002, CapitaMall Trust became the first Singapore-listed REIT. A decade on, there are over 20 REITs across the commercial, industrial, hotel and healthcare property sectors.
Low interest rates on bank deposits have helped to keep investor interest high in REITs and other stapled securities.
Industrial REITs for example pay dividends of up to eight per cent -- more than the five to six per cent offered by blue chip stocks.
Gabriel Yap, executive chairman of GCP Global, said: "The REITs are trading at about 20 times the PE (price to earnings ratio) as compared to the real estate developers at only 12 times. Because it's a REIT structure that pays stable dividends, the valuations are much higher."
Some analysts said REITs may be an over-invested asset class.
Excluding other stapled securities and business trusts, such as Hutchison Port Holdings Trust, the REIT market in Singapore has a market capitalisation of around US$38 billion. That is up more than three times from its post-Lehman crisis bottom in 2008.
Terence Wong, executive director at DMG & Partners Research, said: "There is a risk of the sector being over-owned, since everybody wants a piece of the pie right now. We've seen that in 2006 and 2007, where REITs were seen very much as a growth stock. And I think that's the danger.
"Right now, we're seeing the same thing, with the REITs rising about 40 per cent so far this year. When complacency sets in, if the party ends, I think a lot of people will get hurt."
From 2004 to 2007, many REITs enjoyed high valuations due to the stock market boom. REIT managers borrowed money to acquire new properties, increasing their gearing.
But the financial crisis struck in 2008, and many REIT managers with over-geared balance sheets were forced to raise cash by issuing more equity, thereby diluting the value of the stock.
In a little more than six months, from May to December 2008, the market capitalisation of REITs had fallen 2.6 times.
-CNA/ac
- wong chee tat :)
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