CRCT’s 1Q 2019 net property income rises 10.7% to RMB199 million
Strong performance momentum across core multi-tenanted malls
Singapore, 24 April 2019 – CapitaLand Retail China Trust Management Limited (CRCTML), the manager of CapitaLand Retail China Trust (CRCT), today announced that it registered higher net property income (NPI) of RMB198.9 million for the period 1 January to 31 March 2019 (1Q 2019), an increase of 10.7% year-on-year from RMB179.6 million in 1Q 2018. The growth was underpinned by stronger rental growth and lower operating expenses1.
Core income available for distribution to Unitholders was S$24.9 million, 4.9% higher than 1Q 2018 and 8.2% higher than 4Q 2018, with distributable income from joint venture2 increasing 115.9% year-on-year. Total distributable amount to Unitholders for 1Q 2019 was S$25.9 million and distribution per unit was 2.59 cents. Based on CRCT’s closing price of S$1.51 on 24 April 2019, the annualised distribution yield for 1Q 2019 was 7.0%.
Mr Tan Tze Wooi, CEO of CRCTML, said: “China's economy expanded at an encouraging pace of 6.4% in 1Q 2019, with consumer demand showing signs of improvement. The fiscal stimulus rolled out by the Chinese government, which include business and individual tax cuts, is expected to boost consumer sentiments. These developments bode well for CRCT, which has sustained its growth momentum into the new year through proactive asset management and value enhancement initiatives. In 1Q 2019, CRCT’s tenants’ sales increased 9.8%3,4 year-on-year, while shopper traffic grew 14.0%3. Portfolio occupancy as at 31 March 2019 remained high, at 97.4%5. This strong foundation will anchor CRCT’s performance as we forge ahead with our tenant remix strategy to draw more popular concepts.”
“To ensure our malls stay attractive, CRCT’s leasing strategy is geared towards riding new trends to meet changing consumer demand. Our proactive approach has resulted in resilient occupancy level, as well as growth in tenants’ sales and shopper traffic, amidst a competitive environment. We will continue to partner with emerging local and international brands to provide unique and fresh experiences for shoppers. We will also harness synergy from our sponsor’s extensive retail network, which has already led to successful collaborations with popular tenants in several of CRCT malls.”
“On the capital management front, we have completed all of CRCT’s term loan refinancing requirements for 2019. About 80% of CRCT’s total term loans is on fixed interest rates, providing certainty of interest expenses. To mitigate the impact of foreign currency fluctuations, we have hedged approximately 80% of CRCT’s distributable income into Singapore dollars. As part of our proactive portfolio management, we entered into an agreement in 1Q 2019 to divest CRCT’s 51% stake in CapitaMall Wuhu to an unrelated third party. The enhanced financial flexibility from the divestment, coupled with CRCT’s strong financial position, will enable us to pursue acquisition opportunities to drive new growth and further optimise CRCT’s portfolio.”
Footnotes:
1 Operating lease rental expenses associated with the lease contracts in CapitaMall Qibao and CapitaMall Minzhongleyuan have been replaced with net changes in fair value of investment properties and interest expense on lease liabilities under FRS 116 Leases with effect from 1 January 2019.
2 This refers to CRCT’s 51% interest in Rock Square.
3 Includes only multi-tenanted malls based on 100% ownership.
4 Excludes tenant sales from Supermarket and Department Store.
5 Based on all committed leases, excluding CapitaMall Wuhu.
Summary of CRCT results
|
1Q 2019 |
1Q 2018 |
|
|||
Actual S$’000 |
Actual S$’000 |
Change % |
||||
Gross Revenue1 |
55,955 |
55,367 |
1.1 |
|||
Net Property Income1,2 |
39,803 |
37,184 |
7.0 |
|||
Distributable income contribution from joint venture3 |
2,623 |
1,215 |
115.9 |
|||
Income available for distribution to Unitholders |
24,866 |
23,699 |
4.9 |
|||
Capital distribution4 |
1,000 |
3,000 |
(66.7) |
|||
Distributable amount to Unitholders |
25,866 |
26,699 |
(3.1) |
|||
Distribution Per Unit (“DPU”) (cents) |
||||||
DPU before capital distribution |
2.49 |
2.44 |
2.0 |
|||
DPU after capital distribution |
2.59 |
2.75 |
(5.8) |
|||
DPU after capital distribution (annualised) |
10.50 |
10.225 |
2.7 |
|||
|
|
|||||
|
1Q 2019 |
1Q 2018 |
|
|||
|
Actual RMB’000 |
Actual RMB’000 |
Change % |
|||
Gross Revenue |
279,577 |
267,448 |
4.5 |
|||
Net Property Income2 |
198,874 |
179,617 |
10.7 |
|||
Footnotes:
1. Average exchange rate for SGD/RMB.
1Q 2019 |
1Q 2018 |
Change % |
4.996 |
4.830 |
3.4 |
2. Operating lease rental expenses associated with the lease contracts in CapitaMall Qibao and CapitaMall Minzhongleyuan have been replaced with net changes in fair value of investment properties and interest expense on lease liabilities under FRS 116 Leases with effect from 1 January 2019
3. This relates to 51% interest in Rock Square for 1Q 2019 and for the period from 1 February 2018 to 31 March 2018 for 1Q 2018.
4. This relates to the partial distribution of gains from the disposal of CapitaMall Anzhen.
5. FY 2018 actual DPU.
Revenue and net property income
In RMB terms
For 1Q 2019, CRCT registered RMB279.6 million in gross revenue, an increase of 4.5% year-on-year. The increase was due to stronger rental growth from the core multi-tenanted malls, offset mainly by lower revenue in CapitaMall Wuhu, which is currently closed and in the process of being divested to an external party.
In SGD terms
For 1Q 2019, gross revenue was S$56.0 million, 1.1% higher year-on-year. The increase is lower than that in RMB terms due to the stronger SGD against RMB.