CapitaLand Retail China remains upbeat despite challenges.
Edging up 0.6 per cent, the registered net property income (NPI) for CapitaLand Retail China Trust Management (CRCTML), which manages CapitaLand Retail China Trust (CRCT), was RMB161.3 million (US$23.8 million) year-on-year for its third quarter ended September 30.
NPI for the nine months was RMB500.6 million, up 3.3 per cent over the RMB484.7 million for the corresponding period last year.
CapitaLand says the softer NPI growth for the latest quarter was partly because of the Beijing government realigning its tax policy. This affected the NPI of CRCT’s malls in Beijing. Excluding this impact, the NPI for the period would have been 7.4 per cent higher.
“China’s economy grew 6.7 per cent year-on-year in both the third quarter and first nine months of this year, while retail sales in the first nine months expanded 10.4 per cent year-on-year to RMB23.8 trillion,” says CRCTML chairman Victor Liew. “In view of China’s continuing efforts to stimulate domestic consumption to drive economic expansion, CRCT remains positive on China’s retail growth prospects.”
CEO Tony Tan says CRCTML marked a new milestone in the quarter with the acquisition of its first mall in Chengdu. “The addition of Galleria, in Chengdu’s bustling Xinnan Tiandi retail precinct within the affluent Gaoxin district, will diversify CRCT’s income and strengthen the resilience of our portfolio.”
With the deal completed at the end of September, Galleria Chengdu will start contributing income from the fourth quarter.
“In the quarter under review, CapitaMall Wangjing (pictured) and CapitaMall Qibao completed the upgrading works of their facades, which augments our overall efforts to enhance our malls,” says Tan.
“We continue to focus on organic growth through space reconfiguration to optimise the retail mix. For instance, CapitaMall Xizhimen brought in international sports brands Adidas and Nike after reconfiguring a large unit. Both tenants have since achieved robust sales more than 200 per cent higher than the previous tenant.
“At CapitaMall Minzhongleyuan, leasing momentum is picking up in anticipation of the
reopening of Zhongshan Avenue and start of a new subway line.
“Co-working space provider URwork will open its first Wuhan outfit at CapitaMall Minzhongleyuan by December. Targeting retail technology start-ups keen to interact with shoppers, URwork is expected to draw new office crowds to the mall, and further boost shopper traffic with retail activities and innovations from its members.
“With the addition of URwork as a mini-anchor occupying 4120 sqm, CapitaMall Minzhongleyuan’s committed occupancy now stands at more than 80 per cent.”
For the third quarter, CRCTML’s gross revenue was RMB248.8 million, 1.2 per cent lower than the same period last year. This was mainly because of the performances of CapitaMall Minzhongleyuan and CapitaMall Wuhu, which continued to be affected by road closure and tenant mix adjustments respectively.
With a portfolio of 11 income-producing shopping malls, CRCT is the first China shopping mall REIT in Singapore.