CRCT's net property income rises 6.2% in Q1

CRCT's CapitaMall Wangjing in Beijing. Rental growth at the trust's multi-tenanted malls is helping to boost earnings even as China moves towards rebalancing the economy as a consumption-driven one.
CRCT's CapitaMall Wangjing in Beijing. Rental growth at the trust's multi-tenanted malls is helping to boost earnings even as China moves towards rebalancing the economy as a consumption-driven one.PHOTO: CAPITALAND

Rental growth at its multi-tenanted malls boosted earnings at CapitaLand Retail China Trust (CRCT), which posted a 6.2 per cent year- on-year rise in net property income to $36.7 million for the first quarter.

Gross revenue rose 1.9 per cent from a year back to $55.57 million for the three months to March 31.

Distributable income rose 4.5 per cent to $23.2 million for the period, while distribution per unit rose 2.7 per cent to 2.71 cents.

The trust's manager noted that even amid mounting downward pressure on China's economic growth, the country is moving towards rebalancing the economy as a consumption-driven one.

Consumption accounted for 66.4 per cent of China's growth last year, up from 51.2 per cent in 2014.

  • AT A GLANCE

  • GROSS REVENUE: $55.57 million (+1.9% year on year)

  • NET PROPERTY INCOME: $36.7 million (+6.2%)

  • DISTRIBUTABLE INCOME: $23.2 million (+4.5%)

  • DISTRIBUTION PER UNIT: 2.71 cents (+2.7%)

"Given China's continued focus on deepening reforms and encouraging innovation to develop new growth engines... our malls are well-positioned (to benefit from this rise in consumption)," said Mr Victor Liew, chairman of the trust's manager.

CRCT's portfolio had a rental reversion of 7.3 per cent in the first quarter. The portfolio has a weighted average lease-term-to-expiry of 5.9 years by total rent income.

Portfolio occupancy rate weakened a little from 95.1 per cent at Dec 31 to 94.6 per cent at March 31.

Average shopper traffic across five of its multi-tenanted malls fell 1.4 per cent year on year, although average monthly tenants' sales rose 1 per cent over the same period.

The trust's gearing ratio was 28.7 per cent at March 31, up from 27.7 per cent at Dec 31. The rise was mainly due to lower total assets compared with Dec 31, the manager said.

Among the group's assets, investment properties fell 2.6 per cent from the fourth quarter to $2.35 billion, while cash and cash equivalents fell 21.7 per cent to $98.94 million.

Among its liabilities, interest- bearing borrowings rose 0.2 per cent to $707.77 million, while deferred tax liabilities fell 2.6 per cent to $230.5 million.

Net assets fell 4.2 per cent to $1.45 billion for the period, with adjusted net asset value - excluding distributable income - falling from $1.72 at Dec 31 to $1.64 at March 31.

CRCT units closed unchanged at $1.455 yesterday. The results were announced after the market closed.

Rennie Whang

A version of this article appeared in the print edition of The Straits Times on April 14, 2016, with the headline 'CRCT's net property income rises 6.2% in Q1'. Print Edition | Subscribe