CAPITAMALL Trust rose yesterday to its highest in more than two weeks in Singapore after the city-state's largest property trust said dividends to shareholders increased 14 percent on higher rents and contributions from a new property.
The stock rose 9 cents, or 4.4 percent, to S$2.14 (US$1.45) at 10:57am in Singapore, the highest since October 3, according to Bloomberg News. The trust said it will distribute S$60.8 million, or 3.64 cents a share, in the third quarter, compared with S$53.2 million, or 3.4 cents, a year earlier.
CapitaMall's ability to raise rents as Singapore's economy slips into a recession may help draw investors to its portfolio of 14 local shopping malls. The government lowered its 2008 forecast for the nation's growth to 3 percent from a year earlier after the economy entered a recession last quarter.
"There are malls and then there are malls. Some malls are better run than others and have a better positioning, and those are the properties that retailers want to go into. People still need their retail therapy, even during a downturn," said Ong Choon Fah, regional head of research at DTZ Debenham, a Singapore-based property consulting company.
CapitaMall has declined 38 percent in trading this year, the third-best performance among 34 companies tracked by Singapore's FTSE Strait Times Real Estate Index, which has lost 54 percent.
CapitaMall also said yesterday that it will put some upgrading plans for its properties on hold as construction costs rise. The trust, managed by CapitaLand Ltd, Southeast Asia's biggest developer, also said it will scrutinize new investments closely.
"We will be conservatively cautious, review new commitments carefully and will not sacrifice our liquidity for new projects," said Chairman Hsuan Owyang.