SINGAPORE (July 27): The manager of CapitaLand Retail China Trust (CRCT) has announced a 2Q17 DPU of 2.62 cents, bringing 1H17 DPU to 5.36 cents which is 0.8% higher than a year ago.
CapitaLand Retail China Trust Management Limited (CRCTML) says it achieved net property income (NPI) of RMB197.7 million for the 2Q ended June, an increase of 16.3% from the RMB169.9 million for the corresponding period last year.
The increase was mainly due to the contribution from CapitaMall Xinnan that was acquired in Sept 2016, partially offset by the additional tax provision for Beijing malls.
Unitholders can expect to receive their DPU for 1H17 on Sept 20.
In SGD terms, distributable income for 2Q17 was $23.3 million, 4.3% higher than a year ago. DPU of 2.62 cents was 0.4% higher than the 2.61 cents declared a year ago. For the period of 1H17, distributable income was $47.7 million, an increase of 4.7% compared to the same period last year.
During the quarter under review, CRCTML says it continued to identify ways to refresh its mall offerings and attract shoppers. Following UrWork’s successful launch at CapitaMall Minzhongleyuan, the leading co-working space operator opened a new facility at CapitaMall Wangjing with a takeup rate of about 90% for its space.
At CapitaMall Minzhongleyuan, anchor tenant UA Cinemas reopened with more screens and an upgraded viewing experience after a major revamp. CapitaMall Xinnan has signed four popular dining concepts after reconfiguring two former units on Level 4, boosting the same space’s rental income by more than 40%. These tenants will start trading in 3Q17.
Overall, CRCT registered 7.1% in rental reversions at its multi-tenanted malls for 2Q17, while portfolio occupancy as at end June stood at a 96.2%.
Soh Kim Soon, Chairman of CRCTML, says: “China’s economy sustained its growth momentum and expanded 6.9% year-on-year in 2Q 2017, the same rate as last quarter. In the first half of the year, urban disposable income and expenditure per capita grew 6.5% and 5.1% year-on-year respectively. In light of the steady progress in China’s economy underpinned by strengthening domestic consumption, we remain optimistic about China’s long-term retail growth prospects.”
In a separate filing, CRCTML has agreed to sell its entire interest in a company that holds CapitaMall Anzhen to Beijing Hualian Anzhen Business Development Company.
The mall is currently master leased to BHG (Beijing) Department. The transaction price is based on the company’s adjusted net asset value of RMB1.1 billion ($230 million), which is 12.9% above valuation.
Targeted for completion in 4Q this year, the divestment is expected to generate net proceeds of $180.9 million and a net gain of $31.5 million.
In tandem with the divestment, CRCT will recover 4,700 sq m of Level 4 space in CapitaMall Wangjing, also located in Beijing, from the mall’s anchor tenant Beijing Hualian Group (BHG).
CRCT plans to convert the recovered space to house higher-yielding specialty stores and introduce more experiential retail offerings that will inject greater vibrancy to the mall.
The recovered space will undergo reconfiguration works in 4Q 2017, and is expected to progressively contribute income from 2Q18. BHG has also committed to refresh the existing department store, which occupies parts of levels one to three, to a higher-end format that will better appeal to the mall’s target demographics of middle- to high-income families.
Units in CRCT closed 1 cent higher at $1.61.
