#BITING THE BULLET SC FULL#
We understand that TCO should see full occupancy in 2Q17 as the leases have been renewed. However, this comes at the expense of rental reversions as seen in the case of SWP.
Occupancy rates of CMMT’s assets have shown improvements, with the exception of East Coast Mall and TCO, as management continues to focus on maintaining occupancies to ensure its malls remain competitive. This is on the back of the completion of MRT1 construction works as well as the reconfiguration of its floors and reintroduction of more entertainment and food and beverage outlets in both malls. We expect rental reversion for SWP in FY17-FY19 to improve from -20% year-on-year (y-o-y) to -5% y-o-y, and for TCM to turn around into positive territory from FY18. Key takeaways from the meeting: i) Portfolio rental reversion should improve once the tenant reconfiguration and mass rapid transit Line 1 (MRT1) construction are completed ii) Sungai Wang Plaza (SWP) and Tropicana City Mall (TCM) are undergoing tenant remixing to improve occupancy rates iii) Tropicana City Office (TCO) should see full occupancy in the second quarter of 2017 (2Q17) as leases have been renewed and iv) majority of the expiring leases in financial year 2017 (FY17) are for anchor tenants.ĬMMT’s portfolio reversions have come under pressure (-3.5% in FY16), dragged down mainly by SWP and TCM which saw rental reversions of -43% and -7% respectively. Maintain hold with a lower target price of RM1.59: We met with CapitaLand Malaysia Mall Trust (CMMT) management and came out slightly negative on its near-term prospects.
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