CRCT’s FY 2018 distributable income up 9.4% year-on-year
Driven by proactive reconstitution strategy
Singapore, 1 February 2019 – CapitaLand Retail China Trust Management Limited (CRCTML), the manager of CapitaLand Retail China Trust (CRCT), announced today that it achieved distributable income of S$99.7 million for the period 1 January to 31 December 2018 (FY 2018). This represented an increase of 9.4% from the S$91.1 million in FY 2017. The growth was attributable to newly acquired Rock Square and the improved performance in CRCT’s core multi-tenanted malls. Distribution per unit (DPU) for FY 2018 rose 1.2% year-on-year to 10.22 cents on an enlarged unit base1. Based on CRCT’s closing price of S$1.50 on 31 January 2019, the distribution yield for FY 2018 was 6.8%.
For the period 1 October to 31 December 2018 (4Q 2018), distributable income was S$23.7 million, 7.7% higher year-on-year. DPU for 4Q 2018 was 2.42 cents, an increase of 2.1% from a year ago. Unitholders will receive their DPU for 4Q 2018, along with their DPU of 2.41 cents for 3Q 2018 totalling 4.83 cents, on 28 March 2019. The book closure date is 13 February 2019.
Mr Soh Kim Soon, Chairman of CRCTML, said: “Notwithstanding uncertainties in the domestic and global economies, China’s retail sales rose 9.0% year-on-year to RMB38.1 trillion in 2018. This was underpinned by urban disposable income and expenditure per capita, which increased 7.8% and 6.8% year-on-year respectively. China’s more moderate pace of growth is reflective of an economy undergoing transition and its long-term fundamentals remain positive. We are confident that CRCT’s quality family-oriented shopping malls will continue to benefit from China’s growing middle class and policies implemented to stimulate the economy.”
Mr Tan Tze Wooi, CEO of CRCTML, said: “CRCT delivered a resilient set of results in FY 2018 on the back of strong operating performance. Portfolio occupancy as at 31 December 2018 was 97.5% and rental reversion was 10.9%. Tenants’ sales at our multi-tenanted malls grew 18.8% year-on-year, while shopper traffic was up 19.4%. Further to the acquisition of Rock Square, CRCT’s investment property value2 surged 17.8% to RMB13,993 million as at 31 December 2018. Through active balance sheet management, we have already completed CRCT’s refinancing requirements for 2019 with 80%3 of the total debt on fixed interest rates. As at 31 December 2018, about 80% of CRCT’s distributable income were hedged into Singapore dollars to mitigate the impact of foreign currency fluctuations.”
Footnotes:
1CRCT issued 64.4 million new units on 7 December 2017 under a private placement.
2CRCT has 51.0% effective interest in Rock Square and CapitaMall Wuhu.
3Excludes money market lines.
“CRCT’s growth in FY 2018 underscores our proactive asset management strategy of continually extracting value from both established and newly acquired assets. CapitaMall Wangjing posted a rental reversion of 15.7% after converting 4,700 square metres (sq m) of anchor tenant space on Level 4 to specialty stores.
The mall’s Level 8 rental income will rise by around 50% after transforming 500 sq m of common area into leasable space for coworking operator Ucommune. CapitaMall Xinnan netted 17.9% in rental reversion by reconfiguring its Basement 1 space to accommodate more popular brands.
Since acquisition, Rock Square has achieved four consecutive quarters of rental reversions above 20% and a double-digit year-on-year increase in average sales per sq m for specialty stores. These positive outcomes will set the foundation for future growth.”
“To further optimise our portfolio, we have entered into a bundle deal in Hohhot with unrelated third parties to divest CapitaMall Saihan and acquire a new mall that is double in size and has a longer balance tenure. Given the new mall’s higher growth potential, CRCT will be in an even stronger position to tap Hohhot’s promising retail growth. The deal is structured to minimise income disruption as the closure and divestment of CapitaMall Saihan will take place after the new mall is operational in 2H 2020. Supported by CRCT’s strong financial position, we will continue to explore suitable acquisition opportunities to grow and rejuvenate our portfolio.”
Summary of CRCT results
Periods: 1 October to 31 December (4Q) and 1 January to 31 December (FY)
|
4Q 2018 |
4Q 2017 |
Change %
|
FY 2018 |
FY 20171 |
Change % |
|
Actual S$’000 |
Actual S$’000 |
Actual S$’000 |
Actual S$’000 |
||
Gross Revenue2 |
55,742 |
54,107 |
3.0 |
222,739 |
229,190 |
(2.8)3 |
Net Property Income2 |
35,878 |
32,987 |
8.8 |
147,423 |
149,212 |
(1.2)3 |
Distributable income contribution from joint ventures4 |
2,524 |
- |
100.0 |
7,601 |
- |
100.0 |
Distributable amount to Unitholders |
23,734 |
22,035 |
7.7 |
99,741 |
91,136 |
9.4 |
Distribution Per Unit (“DPU”) (cents) |
||||||
For the period5 |
2.42 |
2.37 |
2.1 |
10.22 |
10.10 |
1.2 |
Annualised |
9.60 |
9.40 |
2.1 |
10.22 |
10.10 |
1.2 |
For Information Only |
|
|
|
|
|
|
DPU (cents) (adjusted with the enlarged Units in issue)6 |
2.42 |
2.28 |
6.1 |
10.22 |
9.50 |
7.6 |
|
4Q 2018 |
4Q 2017 |
Change %
|
FY 2018 |
FY 20171 |
Change % |
|
Actual RMB’000 |
Actual RMB’000 |
Actual RMB’000 |
Actual RMB’000 |
||
Gross Revenue |
281,033 |
264,810 |
6.1 |
1,092,289 |
1,122,164 |
(2.7)3 |
Net Property Income |
181,070 |
161,441 |
12.2 |
722,948 |
730,567 |
(1.0)3 |
Footnotes:
1. The financial results include CapitaMall Anzhen for period from 1 January 2017 to 30 June 2017. The mall was divested in July 2017.
2. Average exchange rate for SGD/RMB
4Q 2018 |
4Q 2017 |
Change % |
FY 2018 |
FY 2017 |
Change % |
5.047 |
4.894 |
3.1 |
4.904 |
4.896 |
0.2 |
3. The drop is due to no contribution from CapitaMall Anzhen (which was divested in July 2017) in FY 2018.
4. This relates to 51% interest in Rock Square for 4Q 2018 and for the period from 1 February 2018 to 31 December 2018.
5. The DPU is calculated on an enlarged unit base through a private placement in which 64,392,000 units were issued on 7 December 2017.
6. Adjusted DPU for 4Q 2017 of 2.28 cents was based on 966.2 million Units and FY 2017 of 9.50 cents was based on 953.1 million Units from 1 January 2017 to 30 June 2017 and 966.2 million Units from 1 July 2017 to 31 December 2017.