CRCT's DPU rises 12.3% in third quarter

A stronger yuan boosts returns at retail trust with portfolio of 10 malls in six Chinese cities

A favourable exchange rate has boosted returns at CapitaLand Retail China Trust (CRCT) and delivered a better distribution per unit (DPU) for the third quarter .

DPU for the three months to Sept 30 rose 12.3 per cent to 2.64 cents, from 2.35 cents a year earlier.

A stronger yuan against the Singapore dollar helped to lift gross revenue for the third quarter to about $55.3 million - up 7.5 per cent from the previous year.

It also had a positive impact on net property income for its portfolio of malls, which surged 9.1 per cent to $35.2 million. Distributable income was up 14.2 per cent to $22.3 million in the third quarter.

CRCT has a portfolio of 10 shopping malls in six Chinese cities, including Beijing, Shanghai, Zhengzhou and Wuhu.

Mr Tony Tan, chief executive of CapitaLand Retail China Trust Management, CRCT's manager, said in a statement yesterday: "Rental reversion for the quarter continued to be strong at 10.9 per cent, with the majority of our malls registering double-digit growth."

  • AT A GLANCE

    GROSS REVENUE

    $55.3 million (+7.5%)

    NET PROPERTY INCOME

    $35.2 million (+9.1%)

    DISTRIBUTION PER UNIT

    2.64 cents (+12.3%)

This, however, excluded CapitaMall Minzhongleyuan in Wuhan, which is affected by a temporary closure of the road in front of the property to facilitate the construction of a new subway line.

Mr Tan said that portfolio occupancy stood at 94.8 per cent as at Sept 30. Excluding the mall in Wuhan, tenants' sales rose 12.7 per cent, as shopper traffic for the quarter inched up 2.4 per cent compared to the previous year.

Work is being carried out to "refresh and improve the trade mix" at its malls. For instance, CapitaMall Xizhimen in Beijing is adding more child-related goods and services to cater to growing demand from young families. Mr Tan said a section of the mall will be reconfigured into a kids' zone, with new tenants offering children's apparel as well as enrichment classes.

Renovation works are under way at another two of its malls in Beijing.

"All these initiatives will further enhance the overall appeal and shopping experience at our malls," Mr Tan said.

CRCT had a gearing of 28.5 per cent and its average cost of debt was 2.98 per cent as at Sept 30.

The trust's manager said it remains "upbeat" about China's retail growth prospects, with the Chinese government reiterating its commitment to rebalancing its economy by driving up consumption.

A version of this article appeared in the print edition of The Straits Times on October 24, 2015, with the headline 'CRCT's DPU rises 12.3% in third quarter'. Print Edition | Subscribe