What a breath-taking form! For the past one year, numerous blue chips in Singapore Exchange suffered from a terrible loss of form, causing many wealth builders to lose their pants. Many REITs were not spared from the rout either. CapitaLand Mall Trust unit price is one of the rarest of rare counters to buck the trend to enjoy a magnificent rally. The gravity-defying form of CapitaLand Mall Trust unit price is certainly intriguing as the unit price remained bullish even after a massive $277.6 million private placement exercise in November 2018.
With distribution yield of 4.8% and Price/Book Value of 1.19 as of 11 February 2018, current CapitaLand Mall Trust unit price is indeed attractive. The top three major shareholders are CapitaLand Limited (27.12%), BlackRock (7%) and NTUC Enterprise Co-operative (3.93%). With such a stellar group of institutional investors, investing in CapitaLand Mall Trust seems like absolute no-brainer. Interestingly, NTUC used to be a substantial shareholder with 5% stake. However, since September 2018, NTUC had quietly pared down its stake in CapitaLand Mall Trust to the current 3.93%.
In this equity research article, I will share my insights on what are the factors that I would look out for when selecting the REITs to invest in. Is CapitaLand Mall Trust your ticket to financial freedom?
In CapitaLand Mall, We Trust
In my previous article, I briefly talked about CapitaLand Mall Trust being the first REIT to be listed by CapitaLand in July 2002. That was an important milestone for Singapore capital market as it was also the first REIT to be launched on Singapore Exchange.
How time flies. Seventeen years had passed by and CapitaLand Mall Trust unit price had steadily increased from IPO price of $0.96 to the current $2.40. To put the icing on the cake, CapitaLand Mall had distributed a grand total of $1.72 per unit during this period. On the back of the price appreciation and the total distributions, long-term investors must be laughing all the way to the bank. Question now is whether CapitaLand Mall Trust unit price is safe to enter given the massive run-up.
In my view, even though big boy (NTUC) had reduced its stake, there is still headroom for further increase of CapitaLand Mall Trust unit price. Before the Great Financial Crisis, CapitaLand Mall Trust unit price was trading at $2.80 bandwidth in 2008. So I don’t see why CapitaLand Mall Trust unit price would not hit $2.80 or even higher this time round.
With a market capitalization of $8.8 billion, CapitaLand Mall Trust is considered [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
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