CapitaLand Retail China Trust to add office and industrial assets
This will give the trust greater access to a larger pool of investment targets
Claudia Tan HS
Singapore
CAPITALAND Retail China Trust (CRCT) will be expanding its investment strategy beyond the retail sector to include assets that are used for office and industrial purposes, CRCT's manager announced in a bourse filing on Wednesday.
It will focus on long-term investment in a "diversified portfolio of income-producing real estate and real estate-related assets in China, Hong Kong and Macau".
This includes assets used primarily for retail, office and industrial purposes, including business parks, logistics facilities, data centres and integrated developments.
The diversification is expected to give CRCT greater access to a larger pool of investment targets, which may bring attractive yields and increased capital appreciation potential, said the manager.
In addition, CRCT would gain exposure to a more extensive pool of tenants across the sectors to reduce tenant concentration risk.
As different real estate asset classes have varying cycles of rental growth, occupancy rates and other market specific risks, a diverse portfolio will provide CRCT with a more balanced and stable rental revenue, said the manager.
This will enhance CRCT's ability to deliver stable and sustainable distributions to unitholders, the manager added.
As at June 2020, CRCT had a portfolio of 13 properties totalling approximately S$3.55 billion, compared with its initial portfolio of seven properties worth around S$689 million in 2006.
Units of CRCT closed at S$1.11 on Wednesday, down S$0.01 or 0.9 per cent.
