CRCT’s 2Q 2014 distributable income rises 18.7% year-on-year
Distribution per unit increases 8.8%
Singapore, 24 July 2014 – CapitaRetail China Trust Management Limited (CRCTML), the manager of CapitaRetail China Trust (CRCT), announced today that it achieved distributable income of S$21.3 million for the period from 1 April to 30 June 2014 (2Q 2014), an increase of 18.7% over the S$17.9 million for 2Q 2013.
Distribution per unit (DPU) for 2Q 2014 was 2.59 cents, an increase of 8.8% from the 2.38 cents for the corresponding period a year ago. Based on an annualised DPU of 10.39 cents and CRCT’s closing price of S$1.58 per unit on 23 July 2014, the annualised distribution yield for 2Q 2014 was 6.6%. Unitholders can expect to receive their DPU for 2Q 2014, along with their DPU for 1Q 2014, totalling 4.99 cents on 25 September 2014.
Mr Victor Liew, Chairman of CRCTML, said, “In the second quarter of 2014, China’s economy expanded 7.5% year-on-year and in the first half of the year, the country’s retail sales rose by 12.1% year-on-year to RMB12.4 trillion. With the Chinese government’s strong commitment to balanced and sustainable long-term growth, CRCT remains upbeat on China’s retail sales prospects.”
Mr Tony Tan, CEO of CRCTML, said, “For the quarter, our portfolio of malls registered 29.5% growth in net property income (NPI), underpinned by new contributions from the acquisition of CapitaMall Grand Canyon and asset enhancement of CapitaMall Minzhongleyuan. We also recorded robust rental reversions of 24.9% at our multi-tenanted malls and a consistently high occupancy rate of 98.1% across the portfolio. Tenants’ sales at our multi-tenanted malls increased 13.6%1 year-on-year, while shopper traffic grew 5.5% .”
“CapitaMall Minzhongleyuan reopened in May 2014 and retailers and shoppers alike have responded positively to the revamped mall, which now boasts modern facilities such as a weather-proof skylight roof, elevators and free Wi-Fi service, while retaining the charms of a heritage building. As at end-June 2014, CapitaMall Minzhongleyuan achieved a committed occupancy rate of 91.2% with an enhanced tenant mix that includes popular local and foreign brands such as adidas, Caffé Bene, Gong Cha, Hotwind, Innisfree, Starbucks and Studio City Cinema.”
“Our other multi-tenanted malls continued to post strong growth, contributing to our higher earnings. These include CapitaMall Xizhimen, CapitaMall Wangjing and CapitaMall Saihan, which registered NPI growth of 10.9%, 14.8% and 22.5%, respectively. Their sustained growth is an outcome of our proactive asset management strategy, which involves regular adjustments to our tenant mix in line with ever-changing consumer needs.”
Distribution Reinvestment Plan
CRCTML has elected to apply the Distribution Reinvestment Plan (DRP) established on 21 March 2013 to the distributions for the first half of 2014. 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 enlarge its working capital.
To encourage unitholders to participate in this round of DRP, CRCT will offer a 2.0% discount to the volume-weighted average trade price per unit of 10 market days up to the book closure date on 8 August 2014.
Summary of CRCT results
Periods: 1 April to 30 June (2Q) and 1 January to 30 June (1H)
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Revenue and net property income
In RMB terms
Gross revenue was RMB249.9 million, 24.9% higher than 2Q 2013. This was mainly due to the new contribution from CapitaMall Grand Canyon – which accounted for 16.9% of the growth in total gross revenue; higher revenue from CapitaMall Minzhongleyuan – which was reopened in May 2014 after the completion of asset enhancement works; and higher rental growth from the other multi-tenanted malls.
NPI was RMB167.6 million, 26.9% higher than 2Q 2013.
In SGD terms
Gross revenue for 2Q 2014 increased 27.5% year-on-year to S$51.0 million and NPI rose 29.5% year-on-year to S$34.2 million. This was mainly due to a stronger RMB against SGD in 2Q 2014 compared to 2Q 2013.
As at 30 June 2014, the valuation of CRCT’s portfolio was RMB10.4 billion, an increase of 3.7% over the previous valuation conducted in December 2013.
CRCT’s gearing as at 30 June 2014 was 29.8%, with an interest coverage of 5.5 times and average cost of debt of 3.60%.