UOB Kay Hian: CapitaMall Trust - 1 Apr 2008

Proactive Enhancements

CapitaMall Trust (CMT) invests in quality income-producing real estate used for retail purposes. It owns 13 retail malls strategically located in suburban areas and downtown core. CMT is the largest retail REIT in Singapore with a market share of 13% for private retail stock. It also has a
20% stake in CapitaRetail China Trust (CRCT), a China-based retail REIT listed on Singapore Exchange. CMT was assigned a corporate rating of A2 with a stable outlook by Moody's Investor Services.

Creating office blocks at Funan DigitaLife and Tampines Mall. CMT has received provisional permission to utilise unused gross floor area (GFA) of 385,500sf for Funan DigitaLife, which has only utilised 3.8 of its allowable plot ratio of 7.0. The unused GFA will be utilised to build a four-storey office block with an estimated net lettable area (NLA) of 277,630sf on top of the existing mall. NLA for retail will also increase 14% from 296,601sf to an estimated 338,360sf. In addition, CMT has been granted an increase in plot ratio for Tampines Mall from 3.5 to 4.2. The additional GFA of 95,000sf will be utilised to build an office block on top of the existing mall. We expect construction to be completed by 2H10 and have factored in contributions from the two office blocks starting 1Q11.

CMT provides 2008 distribution yield of 4.51%, a healthy spread of 2.35% over 10-year Singapore government bond yield of 2.16%. Our target price is S$3.83 based on the two-stage dividend discount model.

Major Shareholders: Capitaland Ltd 31.2%, Pyramex Investments Pte Ltd 18.1%.