Solid growth for CapitaLand Retail China Trust
China’s slowing growth has failed to diminish returns for CapitaLand Retail China Trust (CRCT).
CapitaLand Retail China Trust Management (CRCTML), which manages the trust, has reported a net property income of S$36.7 million for the first quarter. That’s 6.2 per cent higher than the S$34.5 million for the same time last year.
Distributable income for 1Q 2016 was S$23.2 million, an increase of 4.5 per cent over the S$22.2 million last year.
Victor Liew, chairman of CRCTML, said the Chinese government has set a growth target of 6.5 per cent to 7 per cent for 2016, and its reform efforts to rebalance the economy towards a consumption-driven model “are showing steady progress”.
“Consumption accounted for 66.4 per cent of China’s GDP growth in 2015, up from 51.2 per cent in 2014. Given China’s continued focus on deepening reforms and encouraging innovation to develop new growth engines and improve living standards, our malls are well-positioned to benefit from the continued rise in the country’s consumption,” Liew said.
Tony Tan, CEO of CRCTML, added: “For 1Q 2016, net property income for our malls grew 6.2 per cent and rental reversion was 7.3 per cent. Our portfolio occupancy as at 31 March was 94.6 per cent.”
Tan said CRCTML would continue to refresh its malls and tenant mix to stay ahead of Chinese shoppers’ increasingly sophisticated aspirations and needs.
“Chinese restaurant Jing Ge Steamboat opened at CapitaMall Xizhimen to positive response from diners. Citygarden, which specialises in Singaporean dishes, will also be opening to further diversify the mall’s food and beverage options. CapitaMall Qibao enhanced its fashion offerings with the introduction of trendy young women’s fashion brand Binkeke,” he said.
To enhance the shopping experience, CapitaMall Saihan recently commenced facade upgrading, which is slated to be completed by the third quarter. Renovation works at CapitaMall Wangjing are also on track to unveil the mall’s refreshed outlook by June.
“Going forward, we will continue to strengthen the retail experience in our malls through asset enhancement initiatives and optimising the tenant mix,” said Tan.
During the first quarter, gross revenue increased RMB6.2 million, or by 2.5 per cent year-on-year. This was mainly due to rental growth from the multi-tenanted malls, and partially offset by lower revenue from CapitaMall Wuhu (pictured) which is currently undergoing tenancy adjustments to achieve a more optimal tenant trade mix. Net property income increased 6.8 per cent over the corresponding period in 2015.
CRCT is the first China shopping mall Real Estate Investment Trust (REIT) in Singapore, with a portfolio of 10 income-producing shopping malls. The geographically diversified portfolio of quality shopping malls is located in six of China’s cities.
The malls are CapitaMall Xizhimen, CapitaMall Wangjing, CapitaMall Grand Canyon, CapitaMall Anzhen and CapitaMall Shuangjing in Beijing; CapitaMall Qibao in Shanghai; CapitaMall Minzhongleyuan in Wuhan, Hubei Province; CapitaMall Erqi in Zhengzhou, Henan Province; CapitaMall Saihan in Hohhot, Inner Mongolia; and CapitaMall Wuhu in Wuhu, Anhui Province. As at 31 March 2016, the total asset size of CRCT is approximately S$2.5 billion.