CapitaLand Retail China Trust ekes out 1.1% gain in Q1 distribution per unit

Zhengzhou Mall in Zhengzhou, China.
Zhengzhou Mall in Zhengzhou, China.PHOTO: CAPITALAND RETAIL CHINA TRUST

SINGAPORE - CapitaLand Retail China Trust (CRCT) eked out a 1.1 per cent rise in first quarter distribution per unit to 2.74 Singapore cents.

Gross revenue was 8.2 per cent higher at S$60.1 million while net property income (NPI) rose 9.8 per cent to S$40.3 million for the three months ended March 31, mainly due to the contribution from CapitaMall Xinnan which was acquired in September 2016.

This was partially offset by the additional tax provision for Beijing malls due to a change from cost to revenue basis effective July 1, 2016.

Dstributable income for the quarter was S$24.4 million, 5 per cent higher than the S$23.2 million a year ago.

Based on CRCT's closing price of S$1.515 today, the annualised distribution yield for the first quarter works out to 7.3 per cent.

In renmimbi term, gross revenue and net property income were up 13.4 per cent and 15.1 per cent, respectively. When translated to the local currency, the percentage gains were lower, owing to the depreciation of the yuan against the Singapore dollar.

Mr Soh Kim Soon, chairman of the reit manager, noted that CRCT's family-oriented shopping malls are well-positioned to benefit from the sustained increase in China's domestic consumption.

Chief executive officer Tan Tze Wooi said the trust's performance was lifted mainly by contribution from newly acquired CapitaMall Xinnan, which notched up its committed occupancy to 99.6 per cent from 98.2 per cent as at Dec 31, 2016.

"Proactive lease management to refresh CapitaMall Xinnan's tenant mix is progressing ahead of schedule and new tenants, such as popular restaurants Lei Men Ramen and Dou Wa, will start contributing income from the second half of this year," he said.

CRCT's performance was also boosted by CapitaMall Minzhongleyuan, which recorded year-on-year increases of more than 90 per cent and 60 per cent in shopper traffic and tenants' sales respectively, after the reopening of Zhongshan Avenue enhanced its accessibility.

As at March 31, CRCT's portfolio occupancy was 96.2 per cent, an improvement over the 95.9 per cent at the end of last quarter.

"Looking ahead, we will continue to optimise the retail mix in our malls and strengthen their appeal so as to further enhance unitholders' value," said Mr Tan.

On the stock market, CRCT units soared 2.4 per cent to S$1.515. The results were announced after market close.