CapitaLand China Trust (CLCT) has reported improved occupancy in its retail and business park portfolio for the first quarter of this year, owing to a recovery in sales and traffic and an increased proportion of the workforce reporting to work, respectively.
For the quarter ended March 31, retail occupancy stood at 94.4 per cent and business park occupancy was at 92.1 per cent.
In a business update released yesterday, the trust manager said "consecutive quarterly improvements" for the retail portfolio and completed acquisitions drove these occupancy rates.
Net property income (NPI) for the first quarter came to 264.2 million yuan (S$54 million), some 80 per cent of the 328.6 million yuan for the first half of last year.
The manager added that 100 per cent ownership of Rock Square, a shopping mall located within the Jiangnanxi retail cluster in the Haizhu district of Guangzhou, and new contributions from CapitaMall Nuohemule contributed to the first-quarter NPI.
This was in addition to recovery in the retail segment, including "normalisation of operating margin" and falls in lease restructuring and arrears cases.
CLCT also reported "improved portfolio diversification" for the first quarter, with essential sectors such as supermarkets and services making up 42.9 per cent of gross rental income of its retail portfolio.
On the business portfolio front, 62.3 per cent of its tenants were from emerging high-growth sectors such as electronics, e-commerce and financial services.
Upcoming plans for its retail portfolio include the divestment of CapitaMall Saihan in the second quarter of this year and the acquisition of CapitaMall Nuohemule. Some 1,000 sq m of net lettable area will also be added to Rock Square over the next few years, said the manager.
Commenting on the outlook for its retail portfolio, CLCT expects the retail sector recovery and consumer sentiments to lead improvement in operations.
As for the business park portfolio, it expects high-tech industries to be a strong driver of demand, in line with China's macroeconomic government support policies. Additionally, "robust leasing demand" is also expected to continue for its business park portfolio.
THE BUSINESS TIMES
