Falling revenue and a change in Chinese tax policy hit CapitaLand Retail China Trust (CRCT) in the third quarter.
The real estate investment trust, which has a portfolio of 11 malls in China, posted distribution per unit (DPU) of 2.36 cents for the three months to Sept 30, down 10.6 per cent from a year earlier.
Net property income (NPI) edged up 0.6 per cent to 161.28 million yuan (S$33 million). The company said slower NPI growth was partly due to the Beijing government's move to charge tax based on revenue with effect from July 1. This affected the trust's five malls there.
The trust manager added that if the impact of the additional taxes was excluded, NPI for the quarter would have been 7.4 per cent higher than a year earlier.
In Singapore-dollar terms, NPI fared worse, falling 6.9 per cent to $32.77 million because of the yuan's weakening against the Singdollar.
The average exchange rate of the yuan against the Singdollar for this quarter is lower by 8.1 per cent compared with the average exchange rate for the same quarter last year.
AT A GLANCE
$50.6 million (-8.5 %)
NET PROPERTY INCOME:
$32.77 million (-6.9%)
DISTRIBUTION PER UNIT:
2.36 cents (-10.6%)
Gross revenue in yuan fell 1.2 per cent to 248.79 million yuan, while it fell 8.5 per cent to $50.6 million in Singdollar terms. Net asset value per unit was $1.56 as at Sept 30, down from $1.77 as at Dec 31 last year.
CapitaMall Qibao in Shanghai did the best of the firm's 11 malls in the third quarter, posting a 6.7 per cent increase in revenue compared with the same period last year.
CapitaMall Wuhu in Anhui province performed the worst, with revenue falling 34.7 per cent. The company added that the centre is undergoing tenancy adjustments to achieve the optimal trade mix.
The trust acquired the Galleria mall in Chengdu this year, its first in the fast-growing city.
Mr Tony Tan, chief executive of the trust's manager, said Galleria will diversify CRCT's income. "With the completion of the acquisition on Sept 30, Galleria will start contributing income from the fourth quarter of this year," he noted.
Mr Victor Liew, chairman of the trust's manager, added: "In view of China's continuing efforts to stimulate domestic consumption to drive economic expansion, CRCT remains positive on China's retail growth prospects."