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CapitaLand Retail China Trust to diversify portfolio to include assets in office and industrial space
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 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 a regulatory filing.
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.
Units of CRCT closed at S$1.11 on Wednesday, down S$0.01 or 0.9 per cent.