Maybank IB said CLMT’s management was cautiously optimistic on the outlook for the rest of the year.
PETALING JAYA: Rental revisions, new retail concepts, improved tenant mix and the strengthening of its portfolio to include more industrial and logistics properties should enhance the outlook for Capitaland Malaysia Trust
(CLMT).
The real estate investment trust (REIT) released its financial results for the first quarter ended March 31, 2025, on Wednesday.
Analysts were generally positive about the REIT, known mainly for its mall properties in the Klang Valley and Penang.
Maybank Investment Bank Research (Maybank IB), which maintained a “buy” call on the REIT with an unchanged target price (TP) of 75 sen per share, said the pipeline of industrial and logistics properties presents an added upside.
Maybank IB said CLMT’s management was cautiously optimistic on the outlook for the rest of the year.
The research house said the rise in the proportion of industrial and logistics properties under the REIT to 7.9% from the current 2.8% would contribute 9% to next year’s net property income.
“CLMT’s retail portfolio remains resilient, with 1Q25 tenant sales up 5.3% year-on-year.
“We expect rental revisions this year to remain in the mid to high single-digit range, supported by upcoming renewals at higher-performing malls outside the Klang Valley,” Maybank IB said, adding that was maintaining its forecasts for the REIT pending the addition of the industrial and logistics properties.
TA Research, which also kept its “buy” call on the REIT with a TP of 82 sen, said the industrial and logistics acquisitions aligned with CLMT’s strategy to enhance portfolio resilience and income visibility.
“Additionally, they come with built-in step-up rental clauses, which will support future rental growth,” the research house noted.
“Management remains committed to identifying yield-accretive opportunities in the industrial and logistics space while maintaining prudent capital management to deliver sustainable returns to unit holders,” the research house said.
It added that the acquisitions located in Johor and Selangor were expected to be completed in the second-half of this year.
As for its mall portfolio, the research house said CLMT continues to enjoy strong support for the malls outside the Klang Valley, which have an occupancy level of over 99%.
“Meanwhile, retail rental revisions remained robust at 12.4% in 1Q25, improving further from 11.3% last year,” TA Research noted.
The research house said CLMT’s management sees the impact from the hike of the electricity rates in Peninsular Malaysia effective July 1 to be relatively contained as the higher utility cost would be passed on to tenants through higher service charges.
The research house maintained an “add” call on CLMT with a TP of 82 sen a share.
