PETALING JAYA: Capitaland Malaysia Trust
is expected to deliver a positive performance in its upcoming financial results for the third quarter of the financial year 2024 (3Q24), underpinned by resilient occupancy rates and higher base rents.
CGS International (CGSI) Research was left with a positive impression following its visit to CapitaLand’s East Coast Mall (ECM) in Kuantan, due to ECM’s robust operational performance.
“The mall, which houses around 210 tenants within the total net lettable area (NLA) of 467,953 sq ft, has consistently maintained a strong occupancy rate of 97% to 99% over the last five years.
“Key anchor tenants include Parkson, AEON Big and Golden Screen Cinemas, which collectively occupy around 40% of the total NLA,” the research house said in its report recently.
Moreover, CGSI Research said ECM has had a healthy tenant mix throughout the years, and the management introduced new and trendy brands such as Boat Noodles, Jonny’s, Christy Ng, Garmin, etc over the last two quarters.
“We believe this new brand lineup would help to create shopping experiences that fit the latest consumer preferences, uplifting the mall’s footfall and tenants’ sales in financial year 2024 (FY24) to FY26.
“Additionally, management highlighted during the visit that ECM saw an average rental reversion of 10% to 11% as of June 2024, slightly higher than the former Klang Valley average of 9%.
“The mall also benefits from the recovery in tourism activities in Malaysia to an extent, given that around 10% of its footfall is made up of local tourists,” the research firm said.
CGSI Research projects ECM’s revenue and net property income to register a three-year compound annual growth rate of 4.7% and 5% respectively in FY23 to FY26, reflecting the upbeat near-term outlook.
It reiterated an “add” call on CapitaLand with a target price of 80 sen. It continues to like the group for its exposure to high-quality malls such as Gurney Plaza and Queensbay Mall, which it believes are poised to deliver high rental reversions.
