Singapore Lim & Tan Securities is maintaining its “buy” call for CapitaLand with $4.15 target price after the developer signed a third-party mall management contract with Singapore Post for its upcoming mall.
This is the third mall management contract that CapitaLand has inked in slightly over six months, after securing the first two in China.
We continue to like the build-up of recurring income streams, especially in the asset-light mall management area that management is targeting to build up fast,” says Lim & Tan in its daily note, adding that the signing of three management contracts in six months validates their solid execution.
Given its fast rising recurring income streams, we believe Capitaland should trade closer to its NAV value of $4.15, adds its research team.
With the contract, Lim & Tan says CapitaLand’s network in Singapore will increase to 20 shopping malls with a combined gross floor area (GFA), excluding car park, of about 14.2 million sf.
As Singapore’s largest shopping mall owner and manager, CapitaLand is in a strong position to leverage their established retail platform to offer their professional expertise to property owners who require support in retail management.
This will further bolster their mall and retailer network, and strengthen their position as market leader in the country’s shopping mall sector. The signing of their first third-party mall management contract in managing the mall at SingPost Centre, which is located in the core of the up-and-coming Paya Lebar Central, will augment CapitaLand Group’s presence in the eastern part of Singapore, where it currently owns and manages three malls.
Under the contract, CapitaLand will oversee the pre-opening and retail management for the five-storey SingPost Centre mall, which has 269,000 sf of GFA, excluding car park, and a net lettable area of about 175,000 sf.
The scope of work will include overseeing the pre-opening of the mall, marketing and promotion activities, lease management and facilities.
Targeted to open in the second half of this year, SingPost Centre will house the new General Post Office, which combines traditional counter service with technology-enabled innovations such as POPStations and eSAM machines over a space measuring 3,330 sf.
Other tenants at SingPost Centre include NTUC FairPrice, Golden Village, Kopitiam, as well as leading retail brands, family entertainment outlets and enrichment centres.Shares of CapitaLand are up 3 cents at $3.67.
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