CRCT registers 3Q 2016 net property income of RMB161.3 million
Completion of acquisition of Galleria, Chengdu, at end of quarter expected to propel future growth
Singapore, 25 October 2016 – CapitaLand Retail China Trust Management Limited (CRCTML), the manager of CapitaLand Retail China Trust (CRCT), announced today that it registered net property income (NPI) of RMB161.3 million for the period 1 July to 30 September 2016 (3Q 2016), 0.6% higher than the RMB160.3 million for the corresponding period last year (3Q 2015). NPI for the period 1 January 2016 to 30 September 2016 (YTD Sep 2016) was RMB500.6 million, an increase of 3.3% over the RMB484.7 million for the corresponding period last year (YTD Sep 2015).
The softer NPI growth for 3Q 2016 was partly due to the Beijing government’s move to align its tax policy with the national practice of charging tax based on revenue from 1 July 2016, which affected the NPI of CRCT’s malls in Beijing. Excluding the impact of the additional taxes, NPI for 3Q 2016 would have been 7.4% higher than 3Q 2015.
Distribution per unit (DPU) for 3Q 2016 was 2.36 cents. Based on an annualised DPU of 9.39 cents and CRCT’s closing price of S$1.60 per unit on 24 October 2016, CRCT’s annualised distribution yield for 3Q 2016 was 5.9%.
Mr Victor Liew, Chairman of CRCTML, said, “China’s economy grew 6.7% year-on-year in both the third quarter and first nine months of 2016, while retail sales in the first nine months of 2016 expanded 10.4% year-on-year to RMB23.8 trillion. The sustained moderate growth reflected the Chinese government’s commitment towards economic reforms, which was also affirmed by the International Monetary Fund’s recent move to include the Chinese yuan in its Special Drawing Right basket. In view of China’s continuing efforts to stimulate domestic consumption to drive economic expansion, CRCT remains positive on China’s retail growth prospects.”
Mr Tony Tan, CEO of CRCTML, said, “We marked a new milestone in the quarter with the acquisition of our first mall in Chengdu, one of the fastest growing cities in China. The addition of Galleria, a popular mall located in Chengdu’s bustling Xinnan Tiandi retail precinct within the affluent Gaoxin District, will diversify CRCT’s income and strengthen the resilience of our portfolio to deliver sustainable growth. With the completion of the acquisition on 30 September 2016, Galleria will start contributing income from 4Q 2016.
“In the quarter under review, CapitaMall Wangjing and CapitaMall Qibao completed the upgrading works of their façade, which augment our overall efforts to enhance our malls’ attractiveness. We continue to focus on organic growth through space reconfiguration to optimise the retail mix. For instance, CapitaMall Xizhimen brought in leading international sports brands Nike and adidas after reconfiguring a large unit on Level 5. Both tenants have since achieved robust sales that were more than 200% higher than the previous tenant.
“At CapitaMall Minzhongleyuan, leasing momentum is picking up in anticipation of the reopening of Zhongshan Avenue and commencement of the new subway Line 6 this yearend. Co-working space operator URWORK will be opening its first Wuhan outfit at CapitaMall Minzhongleyuan by December. Targeting retail technology start-ups keen to interact with shoppers, URWORK is expected to draw new office crowds to the mall, and further boost shopper traffic with retail activities and innovations from its members. With the addition of URWORK as a mini-anchor occupying 4,120 square metres, CapitaMall Minzhongleyuan’s committed occupancy now stands at more than 80%.”
Summary of CRCT results
Periods: 1 July to 30 September (3Q) and 1 January to 30 September (YTD)
Revenue and net property income
In RMB terms
For 3Q 2016, gross revenue was RMB248.8 million, 1.2% lower than 3Q 2015. This was mainly due to the performances of CapitaMall Minzhongleyuan and CapitaMall Wuhu, which continued to be affected by road closure and tenant mix adjustments respectively. The NPI of CRCT’s malls in Beijing had also been affected by the Beijing government’s move to charge tax based on revenue from 1 July 2016.
In SGD terms
As a result of a weaker RMB against SGD, the 3Q 2016 gross revenue of S$50.6 million was 8.5% lower than 3Q 2015, while NPI was S$32.8 million, 6.9% lower than 3Q 2015.