CRCT's Q2 DPU rises 5.4% (Amended)
Gross revenue in Sing dollar terms grows 6.4% and net property income rises 5.3%, on the back of a strong renminbi against S$
Singapore
CAPITALAND Retail China Trust (CRCT) posted a 5.4 per cent rise in distribution per unit (DPU) for the second quarter ended June 30, 2015, to 2.73 Singapore cents.
Gross revenue in Singapore dollar terms grew 6.4 per cent to S$54.26 million and net property income grew 5.3 per cent to S$36.04 million on the back of a strong renminbi against the Singapore dollar. But in renminbi terms, gross revenue dipped 0.1 per cent to 249.6 million yuan while net property income slipped 1.1 per cent to 165.8 million yuan.
The softness stemmed mainly from lower revenue from CapitaMall Minzhongleyuan, which is affected by the road closure for the construction work of a new subway line, and CapitaMall Wuhu, as the mall is undergoing tenancy adjustments. Other multi-tenanted malls however reported higher gross revenue and net property income.
As at June 30, CRCT has a S$2.5 billion portfolio of 10 shopping malls across six Chinese cities. They are CapitaMall Xizhimen, CapitaMall Wangjing, CapitaMall Grand Canyon, CapitaMall Shuangjing and CapitaMall Anzhen in Beijing; CapitaMall Qibao in Shanghai; CapitaMall Erqi in Zhengzhou; CapitaMall Saihan in Huhhot; CapitaMall Minzhongleyuan in Wuhan; and CapitaMall Wuhu in Wuhu where CRCT has a 51 per cent interest.
Tenants' sales at the multi-tenanted malls increased 17.8 per cent year on year, while shopper traffic grew 2 per cent.
The rental reversion achieved at CRCT's multi-tenanted malls during the second quarter was a positive 4.6 per cent - the lowest since 2012, after a positive 12.8 per cent in the first quarter and an average of 17 per cent for the past 14 quarters.
"As part of our proactive mall management strategy to keep abreast of the latest retail trends, we continue to upgrade and refresh the tenant mix at our malls," said the Reit manager's CEO, Tony Tan. "We will continue to optimise the retail mix in our malls and increase their appeal to shoppers to further enhance unitholder value, while continuing to be on the lookout for suitable acquisition opportunities to drive our next phase of growth."
At CapitaMall Qibao, CRCT recovered some 3,800 square metres of space from a gym operator, and reconfigured the space to cater to the expansion needs of existing tenants. CRCT said it also strengthened its sports offerings at CapitaMall Saihan, with the reopening of Nike and introduction of sports brands New Balance and Fila.
At CapitaMall Wangjing, key tenant Le-Wellness Gym reopened after renovations while international brands Tommy Hilfiger and New Balance target to open in the third quarter; at CapitaMall Grand Canyon, Uniqlo is opening in the second or third quarter of next year as a mini-anchor tenant, replacing the leases expiring in the first quarter of next year.
CRCT is also undertaking some asset enhancements at CapitaMall Wangjing, with a refreshed mall facade slated to complete in the first half of next year while the construction of a linkway to a new subway station is pending approval from the Chinese authorities.
Mr Tan noted that recent changes in Reit's regulations have further strengthened CRCT's capacity to look out for suitable opportunities.
CRCT is distributing 5.37 cents per unit for the period of Jan 1 to June 30. The ex-distribution date is Aug 4 and the distribution payment date is Sept 22.
The Reit's manager has elected to apply the distribution reinvestment plan (DRP) to the distributions for the first half of 2015. To encourage unitholders to participate in this round of DRP, CRCT will offer a 2 per cent discount to the volume-weighted average trade price per unit of 10 market days up to the book closure date on Aug 6.
CRCT's units on Wednesday closed 0.5 cent higher at S$1.63.
Amendment: In the original story, we incorrectly mentioned the name of the mall where CRCT is undertaking asset enhancement initiatives. The story is updated to reflect the correct name.
