Singapore, 18 July 2013 – CapitaRetail China Trust Management Limited (CRCTML), the manager of CapitaRetail China Trust (CRCT), announced today that it achieved distributable income of S$17.9 million for the period from 1 April to 30 June 2013 (2Q 2013), an increase of 7.5% over the S$16.6 million for 2Q 2012.
Distribution per unit (DPU) for 2Q 2013 was 2.38 cents1. Based on an annualised DPU of 9.55 cents and CRCT’s closing price of S$1.45 per unit on 17 July 2013, the annualised distribution yield is 6.6%. Unitholders can expect to receive their DPU for 2Q 2013, along with their DPU for 1Q 2013, totalling 4.69 cents on 25 September 2013.
Mr Victor Liew, Chairman of CRCTML, said, “China’s economy grew 7.6% year-on-year in the first half of this year, slightly above the government’s growth target of 7.5% for the whole year. Total retail sales of consumer goods also increased 12.7% year-on-year to reach about RMB11.1 trillion. With China’s continuing commitment to stimulate domestic consumption to drive economic expansion, CRCT remains positive on China’s retail growth prospects.”
Mr Tony Tan, CEO of CRCTML, said, “For the quarter under review, net property income (NPI) grew 6.2% year-on-year to RMB132.1 million, backed by strong rental reversion of 17.3%. Our continual efforts to enrich the tenant mix by bringing in high quality brands to our multi-tenanted malls led to the robust growth performance of our portfolio. Tenants’ sales in these multi-tenanted malls grew 9.5%2 year-on-year, while shopper traffic increased 4.2%.”
“To further grow our portfolio, we entered into a conditional call option agreement with CapitaMalls Asia to acquire an income-producing property, Grand Canyon Mall, in Beijing earlier this week. Grand Canyon Mall is a good fit with our current portfolio of nine malls in China, of which four are in Beijing. Leases accounting for about 52.0% of the mall’s gross rent will be expiring from July 2013 to 2015, of which more than half are expiring this year. This presents us with a good opportunity to maximise the potential of the mall through optimising the floor layout and refreshing its tenancy mix. The proposed acquisition is expected to be completed by the second quarter of next year. It is expected to be yield-accretive upon completion and will contribute to our distributions to unitholders going forward.”
Distribution Reinvestment Plan
CRCTML has elected to apply the Distribution Reinvestment Plan (DRP) established on 21 March 2013 to the distribution for 1H 2013. The plan provides unitholders with the opportunity to receive distributions in the form of fully-paid new units in CRCT, instead of cash. Participation in the plan is optional, and unitholders can allocate all or part of their unitholdings if they choose to participate.
Through the DRP, unitholders will be able to increase their holdings in CRCT without incurring brokerage fees, stamp duties (if any) and other related costs. CRCT also benefits from unitholders’ participation in the plan as the cash, which would otherwise have been paid for distributions, can be retained to fund its growth and expansion – such as the proposed acquisition of Grand Canyon Mall in Beijing which was just announced.
To encourage unitholders to participate in this first roll-out of the DRP, CRCT will offer a 4.0% discount to the volume-weighted average trade price per unit of 10 market days up to the Books Closure Date on 12 August 2013.
Summary of CRCT results
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Revenue and net property income
In RMB terms
Gross revenue for 2Q 2013 was RMB200.0 million, an increase of 5.1% year-on-year. This was mainly due to higher rental growth at multi-tenanted malls. NPI for 2Q 2013 grew 6.2% year-on-year to RMB132.1 million
For 1H 2013, gross revenue was up 5.9% year-on-year to RMB400.7 million, while NPI grew 5.4% year-on-year to RMB264.1 million.
In SGD terms
Gross revenue for 2Q 2013 increased 4.9% year-on-year to S$40.0 million and NPI was up 6.0% year-on-year to S$26.4 million. This was mainly due to a stronger SGD against RMB.
For 1H 2013, gross revenue was 4.3% higher at S$79.3 million, compared to 1H 2012. NPI was S$52.3 million, 3.9% higher year-on-year.
As at 30 June 2013, the valuation of CRCT’s portfolio was RMB7.9 billion, an increase of 4.4% over the previous valuation conducted in December 2012
CRCT’s gearing as at 30 June 2013 was below 25.0%. CRCT enjoys a high interest cover of close to nine times, and its average cost of debt is below 3.0%.
1Excluding the 57 million units issued through private placement in October 2012, DPU for 2Q 2013 would have been 2.58 cents – 7.1% higher than the 2.41 cents for 2Q 2012. 2Excluding CapitaMall Minzhongleyuan, which is undergoing asset enhancement.