UNITS of CapitaLand Retail China Trust (CRCT) fell on Wednesday on the back of its lower distribution per unit (DPU) for the second quarter.

The stock was down two Singapore cents to S$1.59 as at 10.55am.

CRCT reported that its DPU for the three months ended June 30, 2016, stood at 2.61 Singapore cents, down 4.4 per cent from 2.73 Singapore cents a year ago. Income available for distribution slipped 2.5 per cent to S$22.37 million, from S$22.94 million a year ago.

OCBC Investment Research said in a note that with the implementation of China's VAT (value-added tax) reform on May 1, 2016, revenue from May to June was netted off against 5 per cent VAT. Both CapitaMall Minzhongleyuan and CapitaMall Wuhu also continued to face challenges, posting falls in gross revenue contribution. Occupancy remained flat.

The brokerage has placed its "hold" rating and fair value of S$1.43 under review, pending a management briefing.