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• Retail operating metrics in 2H 2023 continued to improve over 1H 2023
• 2H 2023 NPI grew by 10.5% year-on-year 

Singapore, 30 January 2024 – CapitaLand China Trust Management Limited (CLCTML), the manager of CapitaLand China Trust (CLCT or Trust), announced today a net property income (NPI) of RMB1,293.7 million for the financial year 2023 (FY 2023), which is 5.3% higher than FY 2022.  The increase in NPI was boosted by stronger performance in CLCT’s retail portfolio which constitutes 75.9% of Assets Under Management^[1] (AUM), and partially offset by lower contributions from the new economy portfolio.  In 2H 2023, CLCT recorded a 10.5% year-on-year growth in NPI to RMB630.0 million, mainly due to improved operating conditions and positive retail momentum driven by higher occupancies and post-asset enhancement initiatives (AEI).

For FY 2023, CLCT reported a distributable income of S$113.9 million and Distribution Per Unit (DPU) of 6.74 cents.  The distributable income for FY 2023 was impacted by foreign currency translation arising from the strength of the Singapore Dollar (SGD) against the Renminbi (RMB) as well as higher interest expense.  Based on CLCT’s closing price of S$0.825 on 29 January 2024, the distribution yield for FY 2023 was 8.2%.  CLCT’s Record Date is 7 February 2024, and Unitholders will receive the 2H 2023 DPU of 3.00 Singapore cents on 28 March 2024.

CLCT’s portfolio valuation as at 31 December 2023 remained relatively stable, with the diversified portfolio reflecting a year-on-year dip of 0.9%, primarily due to lower signing rents across the market and a slowdown in rental growth rates.

Despite market headwinds, CLCT continued to solidify its portfolio resilience. Through the progressive completion of well-timed AEIs across our portfolio, we have enhanced our income contributions and retail operating metrics, delivering improvements in occupancy, shopper traffic, and tenant sales. In addition, we made decisive moves to optimise our portfolio by winding down operations at CapitaMall Qibao and divesting CapitaMall Shuangjing at an attractive exit yield. This disciplined approach underscores our strategic commitment to pursue growth opportunities as we focus on unlocking value to strengthen our balance sheet and improve financial capacity.

Mr Tan Tze Wooi, CEO of CLCTML

In December 2023, CLCT announced the proposed divestment of CapitaMall Shuangjing for RMB842.0 million (S$157.8 million).  The divestment was completed and subsequently announced on 23 January 2024.

Capital management

CLCT continued to maintain a strong balance sheet with a well-staggered debt maturity profile and diversified sources of funding. CLCT completed refinancing for its loans due in FY 2024 with no further refinancing needs until FY 2025.  As at 31 December 2023, the average term to maturity of borrowings was 3.5 years.

As at 31 December 2023, CLCT’s cost of debt stood at 3.57% per annum, supported by a healthy interest coverage ratio at 3.3 times. To mitigate interest rate risk exposure, about 82% of CLCT’s total debt is on fixed interest rates.

CLCT significantly increased the proportion of its sustainability-linked loans from 13% as at 31 December 2022 to 31% as at 31 December 2023.  CLCT’s gearing was 41.5%, well below the regulatory limit of 50%, as at 31 December 2023.  If the proceeds from the divestment of CapitaMall Shuangjing were received and used to pare down debt, CLCT’s gearing would have improved to approximately 40% as at 31 December 2023.

Sustainability initiatives

CLCT remains committed to making a positive environmental and social impact on the communities where it operates.  In 2023, CLCT participated in the Global Real Estate Sustainability Benchmark (GRESB) Real Estate Assessment where it was awarded a 5-star rating and scored a rating of ‘A’ for Public Disclosure.  The Trust has also upgraded its MSCI ESG rating to ‘BBB’ and achieved a Sustainalytics Risk Rating of ‘Negligible Risk’.

During the year, CLCT obtained LEED Gold certification for one retail mall and three business park properties – CapitaMall Xizhimen, Ascendas Innovation Towers, Ascendas Innovation Hub and Singapore-Hangzhou Science & Technology Park Phase 1^[4].  Both Ascendas Innovation Towers and Ascendas Innovation Hub are also the first properties in the portfolio to have procured offsite renewable power.  Kunshan Bacheng Logistics Park has completed the installation of solar panels and will begin generating renewable energy this year. 

To align tenants to its sustainability goals, CLCT rolled out its green lease programme to encourage tenants to incorporate environmentally friendly features in their premises and adopt sustainable practices.  To-date, CLCT has implemented green leasing for all its properties managed by CLI^[5].

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1. Post-completion of the divestment of CapitaMall Shuangjing as announced on 23 January 2024.
2. Bloomberg, China’s Provinces Mostly Target GDP Growth of 5% of More in 2024, 24 January 2024.
3. Shopper Traffic and Tenant Sales exclude CapitaMall Qibao as the mall had ceased operations since the end of March 2023.
4. Attained LEED Gold status for Block 1 to 3 of Singapore-Hangzhou Science & Technology Park Phase I – the remaining blocks are LEED Gold certified since 2014.
5. Excludes CapitaMall Qibao (the mall had ceased operations since end of March 2023) and CapitaMall Shuangjing (please refer to the announcements dated 6 December 2023 and 23 January 2024).</sub>