Friday, 30 December 2016

Recent Investment/ Portfolio update - Capitaland Mall Trust (C38U.SI)

I have purchased 1200 units in Capitaland Mall Trust [CMT] (Code: C38U.SI) at an average price of $1.875, read below to find out more!

(image credits: capitaland mall asia)

Investment Thesis

Below are some of my thoughts with regards to CMT.

1. Stable Profile - Low Beta

There are people who shun stocks due to their volatile nature, prices fluctuate on a day-to-day basis and occasionally even rocket or plummet due to unexpected good news/bad news. In fact this was one reason why I was also hesitant to invest at the start, I was afraid that I could lose the little that I had. Which was also why I am very comfortable with my position in Capitaland Mall Trust, which faces low volatility compared to the greater market. 

CMT has a Beta (5y) of 0.286. 

Beta? What's Beta?
Simply put, Beta is the volatility of the stock relative to market volatility. Hence, a stock with a beta of 1 implies that the price of the stock fluctuates together with the market. A beta of greater than 1 implies that the stock is more volatile than the market and conversely, a beta lesser than 1 implies that the stock is less volatile than the market. 

CMT with a beta of 0.286 would mean that it is (1- 0.286) x 100% = 71.4% less volatile than the market. This is one reason why I am comfortable with my position in CMT, this is a stock that I would not need to monitor constantly. Perhaps, also contributing to this is a low proportion of free floating shares in the market.

2. Good Value

With the recent rise in interest rates in the US on the 14th of December, and the expectations that there are more to come, REITs in Singapore have taken a hit, with CMT exchanging hands near it's 52-week low ($1.87). It currently also has a price to book value of 0.998. Which means that I have (and so did the other recent investors) paid below the book value. 

Book Value
Book value of a share is the amount that each share is worth, if the company's assets are completely liquidated and divided amongst shareholders (after paying the debtors)

Furthermore, it trades on a decent P/E ratio of 11 and has a decent a trailing 5.9% yield.

3. Personal Views?

I personally have not been to all capitaland mall trust shopping malls, but I have been to most of them. Even though most of their malls are placed alongside malls by other developers, the "shopping atmosphere" simply feels different. Their malls for some reason (to me at least) feels more comfortable than the other shopping malls in the same area. Perhaps this can be attributed to good/strong tenants or a good mix of tenants, as well as a good design layout. This is not something that is tangible nor is it something that can be inputed into calculations, this is very subjective, and if you are interested, I would suggest you take a look at the malls and have a 'feel' of them personally.

Furthermore, their malls are located in verystrategic locations (think Bugis Junction, Tampines Mall, Plaza Singapura etc.) - most of their malls are directly connected, if not connected to major MRT stations and are very convenient choices for shoppers and diners. 


Retail environment remains competitive in Singapore, with vacancies piling up due to oversupply and competition (which I have talked about in my previous post) and it is difficult to comment as to whether or not this will eventually affect CMT further. CMT looks to be safe (for now) as it currently has high levels (generally high 90s%) of committed occupancies and strong tenants. Also, E commerce once again poses significant risks to the retail space.

Funan Mall, which is currently under development (projected to be completed by 4Q 2019), could provide potential upside (with nearly double the floor area) if it is able to successfully attract shoppers with the revamped "mall of the future", but of course there is no guarantee that it will be able to achieve it goals. However with good management at helm, I believe that the potential for upside is greater than the potential for downside, so I see this as a bonus rather than a risk at the moment.

Tampines Mall which is strategically located right beside Tampines MRT now faces even greater competition with the opening of Tampines HUB, an integrated retail and lifestyle center which replaced the old badminton halls and sports stadium that once occupied the plot of land. The hub features a hawker center with >40 Cooked-food stores and many other food stores including pizza hut, gongcha and starbucks which are also tenants of Tampines Mall. Increased competition can potentially lead to a decrease in shopper traffic at Tampines Mall which may eventually put pressure on demand for occupancies in the long run.

Undoubtedly there is probably way more information with regards to upside and downside risks that I have not talked about. What I have written above can be seen as a tiny snapshot of a much bigger picture. 

In summary, I am decently comfortable with this investment and I will work hard to look out for other investment opportunities if permitted by my finances. I hope that you have enjoyed reading my post(s). 😁

Wishing everyone here a very happy and blessed New Year ahead. 

(image credits:

Best Regards,
A 😊


  1. Hi A,

    In my opinion, beta does not signify risk. This is a common misconception, especially when its used in a lot of formula.

    In order to understand risk, let us first define it - risk in investment is the chances of losing money, or even prices staying stagnant for a few years.

    A stock with low correlation to market price doesn't mean it has less chance to lose money. In fact, to reduce risk, careful research and understanding of the company behind it is required.

    A company with a beta of 0.1 can have a high risk if you buy it at a price above its intrinsic value. Similarly, a company with a beta of 1 can be low risk, if you buy it when its undervalued.

    If you fear risk (or losing money), instead of going for low beta stocks, go for undervalued ones. There is a higher chance that those will rise in price.

  2. Hi S,

    Thank you for your insight,

    Sorry i should have been more clear, I meant the risk of downside and fluctuation should an economy wide downturn were to occur.

    I fully agree that proper research and understanding is required. However I feel that buying undervalued stocks does not signify low risks as the prices could have been falling previously resulting in it appearing undervalued (based on trailing figures).

    Thank you for taking out time to read my blog. I will also check out your wordpress, thank you!

    Best Regards,