CRCT’s 3Q 2013 distributable income up 2.1% year-on-year
Healthy growth of 10.1% in tenants’ sales
Singapore, 23 October 2013 – CapitaRetail China Trust Management Limited (CRCTML), the manager of CapitaRetail China Trust (CRCT), announced today an increase of 2.1% in distributable income to S$17.1 million for the period from 1 July 2013 to 30 September 2013 (3Q 2013), compared to S$16.7 million over the same period last year (3Q 2012). This was mainly due to higher revenue growth contributed by better tenants’ sales and higher rental reversions at CapitaMall Xizhimen, CapitaMall Wangjing and CapitaMall Saihan, that offset the absence of contributions from CapitaMall Minzhongleyuan which is currently undergoing asset enhancement works.
Distribution per unit (DPU) for 3Q 2013 was 2.26 cents2. Based on an annualised DPU of 8.97 cents and CRCT’s closing price of S$1.395 per unit on 22 October 2013, the annualised distribution yield is 6.4%.
Mr Victor Liew, Chairman of CRCTML, said, “China’s economic growth remains resilient. The China central bank recently expressed confidence that the country’s economy should exceed the target growth rate of 7.5% this year. In the third quarter of this year, China’s economy expanded 7.8% year-on-year. With total retail sales having grown 12.9% to RMB16.9 trillion in the first nine months of this year, we remain upbeat about the market outlook for China’s retail sector.”
Mr Tony Tan, CEO of CRCTML, said, “We are pleased that the multi-tenanted shopping malls in our portfolio have maintained resilient growth for the quarter under review. Excluding CapitaMall Minzhongleyuan which is closed for asset enhancement, tenants’ sales at our multi-tenanted malls grew by a healthy 10.1%. This is a reflection of the value that we can create through proactive asset management. We are confident that the asset enhancement works underway since July 2013 at CapitaMall Minzhongleyuan will set the foundation for strong future growth. We have already secured leasing commitments and are also in advanced negotiations with other retailers, which together account for nearly 60.0% of the total net lettable area.”
“As for our proposed acquisition of Grand Canyon Mall, we have submitted the application to the Chinese government and we expect to receive official approval before year-end. The target NPI yield3 of the mall in the longer term is 7.0% to 8.0%. Following the expected completion of the acquisition by the first quarter of next year, we can further maximise the potential of this mall and enhance returns to our unitholders.”
Summary of CRCT results
Periods: 1 July to 30 September (3Q) and 1 January to 30 September (YTD)
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Revenue and net property income
In RMB terms
Due to the absence of contributions from CapitaMall Minzhongleyuan which has been closed for asset enhancement since July 2013, gross revenue for 3Q 2013 was RMB191.7 million, 1.3% lower year-on-year. Net property income (NPI) was RMB121.1 million, 4.3% lower than 3Q 2012. Excluding CapitaMall Minzhongleyuan, gross revenue would have been 5.3% higher, while NPI would have risen 1.7%. The absence of revenue from CapitaMall Minzhongleyuan was offset by higher rental growth in CapitaMall Xizhimen, CapitaMall Wangjing and CapitaMall Saihan.
In SGD terms
Gross revenue for 3Q 2013 increased 2.2% year-on-year to S$39.5 million and NPI decreased 0.8% year-on-year to S$25.0 million.
1Includes only tenants at multi-tenanted malls except CapitaMall Minzhongleyuan, which is currently undergoing asset enhancement. 2Excluding the 57 million units issued through private placement in October 2012, DPU for 3Q 2013 would have been 2.44 cents – 0.8% higher than the 2.42 cents for 3Q 2012. 3This does not amount to a forecast and there is no assurance that this NPI yield will be achieved.