CapitaLand Mall Trust (CMT) and sister REIT CapitaLand Commercial Trust (CCT) are proposing a merger through a scheme of arrangement, in which unitholders of both REITs will be voting for on September 29 to form CapitaLand Integrated Commercial Trust (CICT). If approved by unitholders, the merger would turn CICT into the largest pure-play retail REIT on the SGX.
Even with a proposed merger on the horizon, CapitaLand Mall Trust remains a top pick, says Daiwa Capital Markets analyst David Lum. The merger could be distribution per unit (DPU) neutral over FY2021-2022 before reaching positive DPU accretion of 1%-2% from FY2023, he adds in a September 11 note.
Lum is maintaining his “buy” call on the trust, with an unchanged target price of $2.65.
