CLCT’s 1H 2021 distribution per unit rises strongly by 40.1% year-on-year
- Underpinned by year-on-year increase of 84.4% in net property income and 72.9% in distributable income – the highest growth rates since listing
- Significant maiden contribution from newly acquired business park portfolio, which achieved higher occupancy since acquisition, and consolidation of 100% stake in Rock Square
- Sustained improvement in retail occupancy with high double-digit growth in shopper traffic and tenant sales
Singapore, 29 July 2021 – CapitaLand China Trust Management Limited (CLCTML), the manager of CapitaLand China Trust (CLCT), announced today a net property income (NPI) of S$120.3 million for the six months ended 30 June 2021 (1H 2021), an increase of 84.4% from the corresponding period last year (1H 2020). This was mainly due to new contribution from its business park portfolio[1], 100% contribution from Rock Square[2] and new contribution from CapitaMall Nuohemule[3], partially offset by the absence of contribution from CapitaMall Minzhongleyuan and CapitaMall Saihan following their divestment on 10 February and 7 June 2021 respectively. NPI was further boosted by stronger operating performance at CLCT’s malls, including lower tenant reliefs and higher rent collections, as well as higher occupancy and rental reversions at its business park properties.
1H 2021 distributable income (DI) was S$64.1 million, 72.9% higher than 1H 2020. The year-on-year growth rates in NPI and DI were the highest since CLCT’s listing in 2006.
On an enlarged unit base, 1H 2021 distribution per unit (DPU) rose 40.1% to 4.23 cents, compared with 3.02 cents for 1H 2020. CLCT’s Record Date is 6 August 2021, and Unitholders can expect to receive their 1H 2021 DPU on 27 September 2021.
Mr Tan Tze Wooi, CEO of CLCTML, said: “As China’s economic recovery continues to firm, the country’s GDP expanded 12.7%[4] while total retail sales grew 23%[4] for 1H 2021. In view of effective pandemic control and rising vaccination rates in China, further normalisation of the country’s economic activities is expected, which will lead to the expansion of consumer demand and business investments. With a portfolio strategically aligned to China’s economic focus on domestic consumption and innovation to drive greater self-sufficiency, CLCT is well-positioned to ride the country’s growth over the long term.”
“Post mandate expansion, we have seized new opportunities to position CLCT as the proxy for growth in China’s future economy. Gearing for a new phase of expansion, we are actively looking to add quality assets, with a focus on new economy asset classes such as business parks, logistics, data centre and industrial properties in the near term. We will tap opportunities from both our sponsor, as well as third parties to diversify and grow our portfolio mix across asset classes. Further, we will unlock value by divesting non-core assets to recycle capital and improve the resilience of our portfolio. In 1H 2021, we completed the divestment of CapitaMall Saihan and CapitaMall Minzhongleyuan. We remain focused in executing our strategy on acquisitive growth and strengthening portfolio composition to extend our leadership as Singapore’s largest multi-asset China-focused REIT.”
"With a portfolio strategically aligned to China’s economic focus on domestic consumption and innovation to drive greater self-sufficiency, CLCT is well-positioned to ride the country’s growth over the long term."
“Organically, we will continue to enhance returns by extracting value from our existing assets through asset optimisation efforts. CapitaMall Yuhuating has embarked on its first major asset enhancement initiative (AEI) since its opening in 2005, with a focus on improving shopper circulation, refreshing the tenant mix to appeal to a wider customer base and uplifting the shopping experience. We have progressively completed the AEI at Rock Square, adding more than 700 square metres (sq m) of net leasable area on various levels of the mall to date. This quarter, the mall welcomed over 30 new shops spanning 4,000 sq m that greatly enhanced its range of F&B, Fashion and IT offerings.”
Improving operating performance
Following continual efforts to optimise tenant mix and redefine traditional retail spaces to create meaningful experiences for shoppers, CLCT saw an improved portfolio occupancy of 95.4% for its shopping malls as at 30 June 2021. Year-on-year, 1H 2021 portfolio tenant sales increased 40.8% while shopper traffic gained 40.7%.
Since the acquisition was announced, CLCT’s business park portfolio has seen consecutive quarter-on-quarter improvements in occupancy, registering 94% as at 30 June 2021, which was above market levels. This was supported by the 100% return rate for China’s office community and CLCT portfolio’s strong appeal to high-growth and innovation-based industries.
Proactive capital management
CLCT has a well staggered debt maturity, with an average term to maturity of 3.80 years. Majority of the refinancing requirements in 2021 have been completed. About 78% 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 hedged approximately 55% of its undistributed income into Singapore dollars. As at end June 2021, CLCT’s gearing was a healthy 35.9%, well below the regulatory limit of 50%.
Facade of CapitaMall Nuohemule, Hohhot
Interior of CapitaMall Nuohemule, Hohhot
[1] The financial results in 1H 2021 include contributions from Rock Square, Ascendas Xinsu Portfolio, Ascendas Innovation Towers and Ascendas Innovation Hub from 30 December 2020, 4 January 2021, 10 February 2021, and 26 February 2021 respectively. While the acquisitions of the Singapore-Hangzhou Science & Technology Park Phase I and Phase II were completed on 18 June 2021, the risk and reward have been transferred from 15 February 2021.
[2] CLCT completed the acquisition of the remaining 49% interest in Rock Square on 30 December 2020.
[3] CapitaMall Nuohemule opened with 100% occupancy in December 2020.
[4] Source: National Bureau of Statistics of China.
Summary of CLCT results1,2
|
1H 2021 |
1H 2020 |
|
|
Actual S$’000 |
Actual S$’000 |
Change % |
Gross Revenue3,4 |
176,892 |
101,517 |
74.2 |
Net Property Income3 |
120,342 |
65,278 |
84.4 |
Income available for distribution to Unitholders |
64,071 |
35,298 |
81.5 |
Distributable amount to Unitholders5 |
64,071 |
37,048 |
72.9 |
Distribution Per Unit (“DPU”) (cents) |
|||
For the period |
4.23 |
3.02 |
40.1 |
|
1H 2021 |
1H 2020 |
|
|
Actual RMB’000 |
Actual RMB’000 |
Change % |
Gross Revenue4 |
860,995 |
510,986 |
68.5 |
Net Property Income |
585,721 |
328,572 |
78.3 |
Footnotes:
1. The financial results in 1H 2021 excludes contributions from CapitaMall Saihan, CapitaMall Minzhongleyuan and CapitaMall Erqi which were divested on 7 June 2021, 10 February 2021, and 1 June 2020 respectively.
2. The financial results in 1H 2021 include contributions from Rock Square, Ascendas Xinsu Portfolio, Ascendas Innovation Towers and Ascendas Innovation Hub from 30 December 2020, 4 January 2021, 10 February 2021, and 26 February 2021 respectively. While the acquisitions of the Singapore-Hangzhou Science & Technology Park Phase I and Phase II were completed on 18 June 2021, the risk and reward have been transferred from 15 February 2021.
3. Average exchange rate for SGD/RMB.
1H 2021 |
1H 2020 |
Change % |
4.867 |
5.033 |
(3.3) |
4. 1H 2021 and 1H 2020 include rental relief extended to tenants in view of the COVID-19 situation.
5. For 1H 2020, CLCT released $3.5 million retained in FY 2019 from the compensation received by CapitaMall Erqi, following the exit of its anchor tenant. At the same time, $1.8 million was retained from the income available for distribution to Unitholders for general corporate and working capital purposes.