CRCT’s 2Q 2017 net property income rises 16.3% year-on-year
Driven by contribution from CapitaMall Xinnan
Singapore, 27 July 2017 – CapitaLand Retail China Trust Management Limited (CRCTML), the manager of CapitaLand Retail China Trust (CRCT), announced today that it achieved net property income (NPI) of RMB197.7 million for the period 1 April to 30 June 2017 (2Q 2017), an increase of 16.3% from the RMB169.9 million for the corresponding period last year. The increase was mainly due to the contribution from CapitaMall Xinnan that was acquired on 30 September 2016, partially offset by the additional tax provision for Beijing malls due to a change from cost to revenue basis effective 1 July 2016.
In SGD terms, distributable income for 2Q 2017 was S$23.3 million, 4.3% higher than a year ago. For the period from 1 January to 30 June 2017 (1H 2017), distributable income was S$47.7 million, an increase of 4.7% compared to the same period last year. Distribution per unit for 1H 2017 notched up 0.8% to 5.36 Singapore cents. Based on an annualised DPU of 10.81 cents and CRCT’s closing price of S$1.61 per unit on 26 July 2017, the annualised distribution yield for 1H 2017 was 6.7%. Unitholders can expect to receive their DPU for 1H 2017 on 20 September 2017.
Mr Soh Kim Soon, Chairman of CRCTML, said: “China’s economy sustained its growth momentum and expanded 6.9% year-on-year in 2Q 2017, the same rate as last quarter. In the first half of the year, urban disposable income and expenditure per capita grew 6.5% and 5.1% year-on-year respectively. In light of the steady progress in China’s economy underpinned by strengthening domestic consumption, we remain optimistic about China’s long-term retail growth prospects.”
Mr Tan Tze Wooi, CEO of CRCTML, said: “During the quarter under review, we continued to identify ways to refresh our malls’ offerings and attract shoppers. Following UrWork’s successful launch at CapitaMall Minzhongleyuan, the leading coworking space operator opened a new facility at CapitaMall Wangjing with a promising take-up rate of about 90% for its space. At CapitaMall Minzhongleyuan, anchor tenant UA Cinemas reopened with more screens and an upgraded viewing experience after a major revamp. CapitaMall Xinnan has signed four popular dining concepts after reconfiguring two former units on Level 4, boosting the same space’s rental income by more than 40%. These tenants will commence trading in 3Q 2017. Overall, we registered 7.1% in rental reversions at our multi-tenanted malls for 2Q 2017, while portfolio occupancy as at 30 June 2017 stood at a healthy 96.2%.”
Mr Tan added: “As part of portfolio optimisation, we have signed an agreement to unlock the value of CapitaMall Anzhen. Targeted for completion in 4Q 2017, the divestment will boost our financial flexibility to seize new growth opportunities. In addition, we will recover some space from CapitaMall Wangjing’s anchor tenant Beijing Hualian Group (BHG), for conversion into specialty stores to inject more vibrancy to the mall. BHG has also committed to upgrade the department store concept at the mall to widen its appeal to our target shoppers. These moves will concurrently realise the value of a mature master leased asset and enhance the value of a core multi-tenanted asset, thus strengthening CRCT’s portfolio for future growth.”
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 2017. 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 enhance its financial flexibility.
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 4 August 2017.
Summary of CRCT results
Periods: 1 April to 30 June (2Q) and 1 January to 30 June (1H)
Net Property income2
Income available for distribution
Distribution per unit (DPU) (cents)
For the period
Net Property income
1. Includes contribution from CapitaMall Xinnan, which was acquired on 30 September 2016.
2. Average exchange rate for RMB/SGD.
Revenue and net property income
In RMB terms For 1H 2017, gross revenue increased RMB79.1 million, or 15.7% over 1H 2016. This was mainly due to the contribution from CapitaMall Xinnan, which was acquired on 30 September 2016. NPI grew by RMB53.2 million or 15.7% over the corresponding period in 2016.
In SGD terms Gross revenue for 1H 2017 rose by S$12.0 million, or 11.2% compared to 1H 2016 due to the stronger SGD against RMB.