CRCT’s 2Q 2018 distributable income rises 10.0% year-on-year
Boosted by maiden full-quarter contribution from Rock Square
Singapore, 27 July 2018 – CapitaLand Retail China Trust Management Limited (CRCTML), the manager of CapitaLand Retail China Trust (CRCT), announced today that it registered distributable income of S$25.7 million for the period 1 April to 30 June 2018 (2Q 2018), an increase of 10.0% from S$23.3 million a year ago. The stronger performance was boosted by the first full-quarter contribution of Rock Square. Distribution per unit (DPU) for 2Q 2018 was 2.64 cents on an enlarged unit base, representing an increase of 0.8% from 2.62 cents in 2Q 2017, and8.2% higher than 2Q 2017’s adjusted DPU of 2.44 cents following CRCT’s private placement exercise in December 20171.
For the period 1 January to 30 June 2018 (1H 2018), distributable income was S$52.4 million, an increase of 9.8% compared to the same period last year. DPU edged up 0.6% from a year ago to 5.39 cents. On a comparable unit basis1, DPU for 1H 2018 would have been 7.8% higher than 1H 2017’s adjusted DPU of 5.00 cents.
Based on an annualised DPU of 10.59 cents and CRCT’s closing price of S$1.54 per unit on 26 July 2018, the annualised distribution yield for 2Q 2018 was 6.9%. Unitholders can expect to receive their DPU for 2Q 2018, along with DPU for 1Q 2018, on 20 September 2018.
Mr Tan Tze Wooi, CEO of CRCTML, said: “We are pleased that our portfolio reconstitution efforts and proactive asset management are showing positive results, delivering a double-digit growth for 2Q 2018’s distributable income. Rental reversions at our core multi-tenanted malls for the quarter averaged a healthy 10.5%, while portfolio occupancy as at 30 June 2018 was resilient at 97.4%.”
“Since acquiring Rock Square on 31 January 2018, we have focused on extracting the lease renewal upside while enhancing the mall’s tenant mix. This strategy led to strong rental reversions at Rock Square averaging above 20% for the second consecutive quarter. New entrants in the mall include a digital experience store by Xiaomi and popular beverage store Nayuki Tea. To optimise Rock Square’s layout and further expand its offerings, we created over 500 square metres of retail space by converting unutilised space and adding retail kiosks.”
1 CRCT issued 64.4 million new units on 7 December 2018 under a private placement exercise to part-finance the acquisition of Rock Square.
“In 2Q 2018, CapitaMall Wangjing completed the transformation of the recovered space on Level 4 with 19 of the 23 new retailers opened as at June 2018. The new retail zone, which offers a strong mix of lifestyle and experiential retail tenants that host crowd-pulling events, is expected to drive footfall and improve sales for the entire floor with positive spillovers for the rest of the mall. The early recovery of the former anchor tenant space, executed within timeline and budget, demonstrates our proactive asset management approach to strengthen the appeal of CRCT’s malls.”
“During the quarter, we early refinanced S$150 million of loans ahead of maturity in 2019 to lock in favourable rates. In addition, we undertook our maiden issue of S$130 million medium term notes (MTN) under CRCT’s S$1 billion MTN programme, which was well-received by debt investors. Diversifying our funding sources to the debt capital market is part of our capital management strategy to harness greater financial flexibility for our next phase of growth as we actively source for strategic acquisitions to expand our portfolio. As at end June 2018, CRCT’s gearing was a healthy 32.1%, well below the regulatory limit of 45%.”
Distribution Reinvestment Plan
CRCTML has elected to apply the Distribution Reinvestment Plan (DRP) established on 21 March 2013 to the distributions for 1H 2018. 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.
Summary of CRCT results
Periods: 1 April to 30 June (2Q) and 1 January to 30 June (1H)
Net Property Income
contribution from joint venture2
Distributable amount to
Distribution Per Unit (“DPU”) (cents)
For the period3
For Information Only
DPU (cents) (adjusted with the enlarged units in issue)4
1. The financial results exclude CapitaMall Anzhen, which was divested with effect from 1 July 2017.
2. This relates to 51% interest in Rock Square for 2Q 2018 and for period from 1 February 2018 to 30 June 2018.
3. 2018 DPU was based on 969.9 million units and 2017 DPU was based on 888.7 million units.
4. Adjusted DPU for 2Q 2017 of 2.44 cents and 1H 2017 of 5.00 cents were based on 953.1 million units including the private placement units issued in December 2017.