CapitaLand Retail China Trust posts 10.6% drop in Q3 DPU (Amended)

CAPITALAND Retail China Trust (CRCT) reported a 10.6 per cent decline in distribution per unit (DPU) to 2.36 Singapore cents due to the weaker yuan.

Its net property income (NPI) grew 0.6 per cent to 161.28 million yuan and was impacted by a higher property tax provision of 11.2 million yuan made at the Beijing malls due to a change in property tax basis by the local tax authority with effect from July 1, 2016. In Singapore dollar terms, its NPI dropped 6.9 per cent to S$32.77 million because of the relatively weak yuan.

Screening out the impact of property tax, CRCT's NPI could have grown by 7.4 per cent.

Based on an annualised DPU of 9.39 cents and CRCT's closing price of S$1.60 per unit on Oct 24, CRCT's annualised distribution yield for the third quarter was 5.9 per cent.

Victor Liew, chairman of the real estate investment trust (Reit) manager, said that CRCT remains positive on China's retail growth prospects given China's continuing efforts to stimulate domestic consumption to drive economic expansion.

Giving an operational update, the Reit manager's CEO Tony Tan noted that the latest addition of Galleria, a popular mall located in Chengdu's bustling Xinnan Tiandi retail precinct within the affluent Gaoxin District, will diversify CRCT's income and strengthen the resilience of its portfolio. The mall is expected to start contributing income from the fourth quarter.

Two retail malls - CapitaMall Wangjing in Beijing and CapitaMall Qibao in Shanghai Minhang district - completed the upgrading works of their façade during the third quarter. At CapitaMall Minzhongleyuan in Wuhan, leasing momentum is picking up in anticipation of the reopening of Zhongshan Avenue and the commencement of the new subway Line 6 at the end of this year. The Wuhan mall has also reached a committed occupancy of more than 80 per cent with the entry of co-working space operator URWORKas a mini-anchor occupying 4,120 sq m.

Amendment: In the original story, we incorrectly reported a fall in NPI in renminbi terms. The story is revised to reflect this.