Why RHB is cutting CapitaLand Mall Trust to 'neutral'

SINGAPORE (Jan 23): RHB Research has downgraded CapitaLand Mall Trust from a “buy” to a “neutral” recommendation, amid concerns that its rental growth could be affected by the sluggish retail market.

RHB’s analyst Vijay Natarajan notes that CMT could see rentals grow at just 1% for the year, compared with its 10-year average of 6% growth per annum, on the back of the local retail sector’s structural changes to adapt to the changing retail habits of consumers and the poor economic environment.

In fact, retail sales are already expected to continue its fall, after it fell by 2.1% year-on-year for Nov 2016.

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