CLCT posts 2H 2020 distributable income of S$42.7 million
An improvement of 15.2% over 1H 2020
Singapore, 29 January 2021 – CapitaLand China Trust Management Limited (CLCTML), the manager of CapitaLand China Trust (CLCT), formerly known as CapitaLand Retail China Trust, registered a net property income (NPI) of S$69.9 million for the period 1 July to 31 December 2020 (2H 2020), 17.9% lower than 2H 2019. This was mainly due to measures extended to support tenants’ business recovery amidst a challenging COVID-19 environment, the absence of CapitaMall Erqi’s contribution following its divestment on 1 June 2020 as well as lower average portfolio occupancy and rent; offset by incremental contributions from CapitaMall Yuhuating, CapitaMall Xuefu and CapitaMall Aidemengdun, which were acquired on 30 August 2019.
As business conditions in China improved during the second half of the year, CLCT recorded 2H 2020 distributable income of S$42.7 million, 15.2% higher than 1H 2020. The distributable income for 2H 2020 included the release of S$1.8 million of income retained in 1H 2020 and S$1.8 million of compensation received by CapitaMall Erqi retained in FY 2019.
CapitaMall Xuefu, Harbin
CapitaMall Aidemengdun, Harbin
CapitaMall Yuhuating, Changsha
Distribution per unit (DPU) for 2H 2020 was 3.33 cents, an increase from 3.02 cents for 1H 2020. It comprised a DPU of 2.75 cents for the period 1 July to 25 November 2020, which was paid on 4 December 2020; and a DPU of 0.58 cents for the period 26 November to 31 December 2020 on a larger unit base further to the equity fund raising exercise[1] to acquire five business park properties and balance 49% stake in Rock Square. The acquired assets will start contributing income from 2021, following their respective completion. The book closure date for the DPU of 0.58 cents is 8 February 2021.
For the financial year 2020, NPI was S$135.2 million and distributable income was S$79.7 million. Total DPU for the year was 6.35 cents.
Mr Soh Kim Soon, Chairman of CLCTML, said: “China’s GDP expanded by 2.3%[2] in 2020, making it the only major economy in the world to achieve growth in the pandemic year. While COVID-19 risks remain, China has demonstrated decisive management of resurgent infections and vaccine roll-out. Coupled with targeted fiscal and monetary policies, China has been able to sustain its recovery momentum and maintain strong fundamentals as an attractive investment market. Moving forward, China’s focus on domestic consumption and innovation-based industries will bode well for CLCT’s expanded and long-term business strategies in China.”
China’s focus on domestic consumption and innovation-based industries will bode well for CLCT’s expanded and long-term business strategies in China.”
Mr Tan Tze Wooi, CEO of CLCTML, said: “2020 was a challenging yet transformative year for CLCT. While navigating an evolving business landscape changed by COVID-19, we also ushered in a new chapter of growth after expanding our investment mandate. We embarked on our largest acquisition for a portfolio of five business park properties in three new provincial cities – Suzhou, Xi’an and Hangzhou – and the balance 49% stake in Rock Square to improve portfolio resilience and diversification. Despite market volatility, we raised S$326.1 million in our largest equity fund raising exercise1, reflecting Unitholders’ confidence and support in CLCT’s multi-stage growth strategy. As at end December 2020, CLCT’s market capitalisation reached a new high of S$2.1 billion, up 7.6% from a year ago.”
“2020 was also the year that showcased CLCT team’s execution capabilities. We successfully opened CapitaMall Nuohemule in December 2020 with full occupancy and divested CapitaMall Erqi ahead of schedule, all while combating a pandemic, providing assistance to tenants and helping them digitalise their businesses. Collaborating closely with our business partners and communities, we steered the progressive quarter-on-quarter recovery of CLCT’s tenants’ sales and shopper traffic from the trough of 1Q 2020.”
We successfully opened CapitaMall Nuohemule in December 2020 with full occupancy and divested CapitaMall Erqi ahead of schedule, all while combating a pandemic, providing assistance to tenants and helping them digitalise their businesses.
“We will continue to ride on the positive momentum to extract, unlock and create value from our enlarged portfolio. Plans include space reconfiguration in CapitaMall Yuhuating and redevelopment of the northern belt in Ascendas Xinsu Portfolio. As part of portfolio reconstitution, we entered into an agreement on 11 January 2021 to divest CapitaMall Minzhongleyuan, a non-core asset with limited upside. The divestment proceeds will enhance CLCT’s balance sheet and financial capacity to pursue accretive growth opportunities.”
Proactive Capital Management
CLCT has a well staggered debt maturity. About 80.0% of CLCT’s total term loans is on fixed interest rates, providing certainty of interest expenses. To mitigate the impact of foreign currency fluctuations, CLCT fully hedged its undistributed income in FY 2020 into Singapore dollars. As at end December 2020, CLCT’s gearing was a healthy 31.8%, well below the regulatory limit of 50.0%.
[1] Raised gross proceeds of approximately S$326.1 million from equity fund raising through the issuance of 274.3 million new units comprising private placement of 205.3 million new units at S$1.195 per unit and non-renounceable preferential offering of 69.0 million units at S$1.170 per unit.
[2] Source: National Bureau of Statistics of China.
Summary of CLCT results1,2
Periods: 1 July to 31 December (2H) and 1 January to 31 December (FY)1,2
|
2H 2020 |
2H 2019 |
|
FY 2020 |
FY 2019 |
|
|
Actual S$’000 |
Actual S$’000 |
Change % |
Actual S$’000 |
Actual S$’000 |
Change % |
Gross Revenue3 |
109,008 |
127,047 |
(14.2) |
210,525 |
238,185 |
(11.6) |
Net Property Income3,4 |
69,918 |
85,204 |
(17.9) |
135,196 |
165,371 |
(18.2) |
Distributable income contribution from joint venture5 |
4,922 |
5,583 |
(11.8) |
9,701 |
10,696 |
(9.3) |
Income available for distribution to Unitholders |
39,180 |
60,569 |
(35.3) |
74,478 |
110,800 |
(32.8) |
Distributable amount to Unitholders (before Capital Distribution)6 |
42,680 |
55,319 |
(22.8) |
79,728 |
105,550 |
(24.5) |
Capital Distribution7 |
- |
- |
- |
- |
1,000 |
(100.0) |
Distributable amount to Unitholders6 |
42,680 |
55,319 |
(22.8) |
79,728 |
106,550 |
(25.2) |
Distribution Per Unit (“DPU”) (cents) |
||||||
DPU before Capital Distribution |
3.33 |
4.77 |
(30.2) |
6.358 |
9.80 |
(35.2) |
DPU after Capital Distribution |
3.33 |
4.77 |
(30.2) |
6.358 |
9.90 |
|
|
2H 2020 |
2H 2019 |
|
FY 2020 |
FY 2019 |
|
|
Actual RMB’000 |
Actual RMB’000 |
Change % |
Actual RMB’000 |
Actual RMB’000 |
Change % |
Gross Revenue |
545,240 |
648,087 |
(15.9) |
1,056,226 |
1,202,587 |
(12.2) |
Net Property Income |
349,622 |
434,995 |
(19.6) |
678,194 |
834,968 |
(18.8) |
|
1 Jan 2020 to 25 Nov 2020 |
26 Nov 2020 to 31 Dec 2020 |
FY 2020 |
|
Actual S$’000 |
Actual S$’000 |
Actual S$’000 |
Gross Revenue |
187,296 |
23,229 |
210,525 |
Net Property Income |
121,564 |
13,632 |
135,196 |
Distributable amount to Unitholders |
71,032 |
8,696 |
79,728 |
Distribution Per Unit (“DPU”) (cents) |
|||
For the period |
5.77 |
0.58 |
6.35 |
Footnotes:
1. The financial results in 2H 2020 and FY 2020 exclude contributions from CapitaMall Erqi and CapitaMall Wuhu which were divested on 1 June 2020 and 1 July 2019 respectively.
2. The financial results in 2H 2020 and FY 2020 include contributions from CapitaMall Xuefu, CapitaMall Yuhuating and CapitaMall Aidemengdun which were acquired on 30 August 2019.
3. Average exchange rate for SGD/RMB.
2H 2020 | 2H 2019 |
Change % | FY 2020 |
FY 2019 |
Change % |
5.000 |
5.105 |
(2.1) |
5.016 |
5.049 |
(0.7) |
4. 2H 2020 and FY 2020 includes rental relief extended to tenants in view of the COVID-19 situation.
5. This relates to 51% interest in Rock Square.
6. CLCT released $1.8 million and $5.3 million retained in FY 2019 from the compensation received by CapitaMall Erqi, following the exit of its anchor tenant in 2H 2020 and FY 2020 respectively. At the same time, $1.8 million which was retained from the income available for distribution to Unitholders in 1H 2020 was also released in the distributable amount to Unitholders in 2H 2020.
7. In FY 2019, capital distribution arose from the gain from the divestment of the equity interest in the company which held CapitaMall Anzhen.
8. Includes 3.02 cents for the period from 1 January 2020 to 30 June 2020, calculated based on 1,222,871,665 Units, 2.75 cents from 1 July 2020 to 25 November 2020, calculated based on 1,232,104,560 Units and 0.58 cents from 26 November to 31 December 2020, calculated based on enlarged unit base of 1,506,433,415 units after the issuance of 205,331,000 Units and 68,997,855 Units via private placement on 26 November 2020 and preferential offering issued on 16 December 2020 respectively.