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CapitaMalls’ 1Q2012 Net Profit Soars 36 Per cent, Builds Shopping Mall in Beijing

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by Ernie B. Calucag

Singapore shopping mall developer CapitaMalls Asia reported a 36-per cent year-on-year jump in net profit to S$66.8 million for the first quarter this year, on higher contributions from its three new malls in Japan.

Net profit in the same period last year was S$49.1 million.

Revenue for the January to March period rose 41 per cent to S$70.9 million from S$50.2 million in the same period a year ago.

This was mainly due to the contributions from its three newly acquired Japan malls, rental revenue from Queensbay Mall in Malaysia, and higher contributions from its management fee business.

Going forward, the mall developer expects to continue its growth given the positive indicators from its key markets in Singapore, China and Malaysia.

“Looking ahead, Singapore is forecast to have higher tourist arrivals of between 13.5 million and 14.5 million this year, which will provide a boost to retail sales. In China, domestic consumption is set to overtake investment as the biggest driver of economic growth this year – the first time in more than a decade. And in Malaysia, retail sales are expected to increase 6.0 per cent this year. We expect to continue our growth for the rest of the year, and remain ready to seize any opportunities to strengthen our leadership position,” said Liew Mun Leong, Chairman of CapitaMalls Asia.

Builds RMB2.3-billion Beijing Mall

And to cash in on China’s growth, the group also announced that it would spend RMB2.3 billion (S$453.71 million) to develop a mall in southern Beijing, buying the land from a subsidiary of the Poly Real Estate Group.

The development will feature a seven-storey, 122,000-square-metre mall, representing a total cost of around RMB19,190 per square metre for construction and land, the group said.

The project is due for completion in 2015.

CapitaMalls Asia, 65-per cent owned by Singapore sovereign wealth fund Temasek, is one of the most active international property developers in China. The new development brings its tally to nine in Beijing.

“Going forward, we remain positive on the prospects for retail sales in the country, given its solid fundamentals – low unemployment rate, strong household balance sheets, and rising urbanisation and incomes,” said CapitaMalls Asia’s CEO Lim Beng Chee.

CapitaMalls Asia has interests in and manages a pan-Asian portfolio of 98 shopping malls across 51 cities in Singapore, China, Malaysia, Japan and India.

“Among local stocks, CapitaMalls Asia is STI’s best performing stock for the first quarter, soaring 45 per cent. While some investors may feel they have missed the boat with this stock it still has potential to please, from its key markets of Singapore, China and Malaysia,” said market strategist Justin Harper of IG Markets in Singapore.

“But a lot hinges on the outcome of China’s slowdown as CapitaMalls has 57 shopping malls spread across 35 cities in the Middle Kingdom,” he added.

CapitaMalls Asia’s shares closed unchanged Wednesday at S$1.57 each.