CLMT: REIT Delivers Strong Earnings on Strategic Acquisitions, Positive Outlook Maintained

A Malaysian REIT reported a robust financial performance for the first nine months of FY2025, with realised net profit meeting analysts’ expectations. The strong results were primarily driven by strategic asset acquisitions and effective portfolio management.

Performance Review

For the nine months ended September 2025 (9M25), the REIT recorded a realised net profit of RM107.2 million, aligning with both TA Securities’ and consensus full-year forecasts at 73% and 70% respectively. Distribution per unit (DPU) for 9M25 increased by 4.1% year-on-year to 3.57 sen, translating to an annualised yield of 7.7% based on the latest closing price. Net property income (NPI) saw an impressive 8.6% year-on-year expansion to RM207.9 million.

This growth was underpinned by positive rental reversions, rental step-ups, and new income contributions from recently acquired logistics assets, including Glenmarie Distribution Centre and Senai Airport City Facilities. Despite these strong year-to-date figures, realised net profit eased slightly by 1.1% quarter-on-quarter in 3Q25 to RM34.7 million, attributed to lower other revenue and higher manager and trustee fees. The REIT’s malls outside the Klang Valley continued to exhibit robust performance, achieving occupancy levels above 98% and maintaining healthy retail rental reversion of +10.9% year-on-year in 9M25. Lease renewals for 2025 are well in hand, with approximately 97.2% of leases already renewed or in advanced negotiation stages, ensuring income visibility.

Strategic Initiatives and Future Outlook

The REIT is actively strengthening its portfolio through proactive lease and asset management. Significant asset enhancement initiatives are underway at Gurney Plaza and 3 Damansara to bolster market positioning and leasing momentum. Furthermore, a new 63,000 sq ft active lifestyle concept, including a water park, is scheduled to open at The Mines by 1Q26, aiming to diversify the mall’s retail mix and enhance visitor engagement.

A strategic focus on expanding its logistics and industrial portfolio continues, with accretive acquisitions in key areas like Senai Airport City and Nusajaya Tech Park. The trust aims to increase logistics and industrial exposure to 20% of its total AUM by 2028, enhancing portfolio diversification and earnings stability. A private placement exercise in 3Q25 raised RM250 million, used to pare down borrowings and reduce aggregate leverage from 43.0% to 39.8%. This move enhances balance sheet flexibility and financial headroom for future growth. The trust also maintains a well-spread debt maturity profile with an average term of 4.1 years and 84% of borrowings at fixed rates, providing protection against interest rate volatility.

Despite raising earnings forecasts for FY25/26/27 by 3.7%/14.2%/14.4% to incorporate contributions from newly acquired assets and higher rental reversions, DPU forecasts were revised down by 5.4%/3.3%/3.2% due to the dilution impact from the issuance of 409.8 million new units, expanding the unit base by 14%.

Analyst Recommendations

TA Securities has reiterated its BUY recommendation, with a target price of RM0.80, representing a potential upside of 29.3% from the last traded price of RM0.615. The valuation incorporates an unchanged CY26 target yield of 6.75% and includes a 3% ESG premium, reflecting the trust’s 4-star ESG rating.