CapitaLand says it is seeing “encouraging signs of recovery” in 3QFY2020’s operating metrics as the Covid-19 situation stabilizes in its two largest markets, China and Singapore.
In its portfolio update released on Nov 3, the group says it has maintained discipline in shoring up liquidity and has been proactivity managing its cash position to maintain “robust” financial and liquidity positions.
The merger between CapitaLand Mall Trust (CMT) and CapitaLand Commercial Trust (CCT) to form the enlarged REIT CapitaLand Integrated Commercial Trust (CICT) was completed on Oct 28, as the group’s repositioning of listed trusts takes shape.
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On Nov 3, CICT began trading on the SGX-ST as CCT was delisted.
CapitaLand Retail China has also become the group’s dedicated listed vehicle for non-lodging assets in China with an investment strategy expansion.
CapitaLand’s residential segment saw Singapore units in 3QFY2020 sold three times the total number sold in the first half of 2020.
The group launched new units at One Pearl Bank and Sengkang Grand Residences to meet increased demand.
In China, sales momentum “remains strong” with over 1,900 units sold in 3QFY2020, 40% higher than the previous quarter, and the third consecutive quarter of improvement.
Handovers year-to-date as at September exceeded the same period in 2019 in total value. CapitaLand says it expects more units to be handed over in the last quarter of 2020.
In Vietnam, handovers for y-t-d tripled in both the number of units and total value compared to 2019. 3QFY2020 total sales in Vietnam doubled that of 1HFY2020.
The group’s retail segment also saw improved operating metrics with shopper traffic and tenant sales reflecting a narrowing gap compared to pre-Covid-19 levels.
Committed occupancy rate remained largely stable and almost all tenants have resumed operations.
As at Sept 2020, the committed occupancy rate for China, Singapore, Japan and Malaysia stood at 89.4%, 97.8%, 99.8% and 87.9% respectively.
About 2% of Singapore tenants have requested for rental relief in accordance with the Covid-19 (Temporary Measures) Act 2020.
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As at Sept 2020, over $320 million of rental rebates have been disbursed to eligible tenants y-t-d.
CapitaLand said its office performance saw strong committed office occupancy across geographies with healthy weighted average lease expiries (WALEs) across its key office markets.
“While leasing remained soft, renewals and new take-ups in 3Q 2020 continued to register positive reversions portfolio-wide,” it says.
CapitaLand saw about 35% of its Singapore portfolio office community returning to their workplaces since the government relaxed workplace regulations on Sept 28, 2020. Across its office portfolio, the group says returning office community has increased.
The group’s business park, industrial and logistics segment saw a robust committed occupancy rate. As at Sept 30, the committed occupancy rate for its Singapore, Australia, UK, US, China and India markets stood at 88.9%, 97.5%, 97.5%, 92.0%, 87.8% and 92.5%.
The group says its asset class benefits from majority of the “new economy” tenants that have been better able to withstand cyclical headwinds.
The segment also saw positive rental reversions across the portfolio y-t-d.
Looking forward, the group is exploring up-and-coming space concepts including Rochester Commons, a campus-style integrated development with a 17-storey Grade A office tower, 135-key business hotel, shared executive learning centre as well as 12 heritage black and white bungalows within the premises.
Bugis Street, managed by CapitaLand, will also be introducing Singapore’s first and flagship esports hostel by Arena, featuring 124 private rooms with pro grade esports gaming equipment, a 12-station gaming arena and vending machine café.
On its lodging business, some 96% of its properties are operational as at Sept 30.
3QFY2020 revenue per available unit (RevPAU) improved by 22% q-o-q.
The group has raised a total of $6.8 billion y-t-d with $2.0 billion of total sustainable financing raised during the same period.
“Notwithstanding the progress, overall business and consumer sentiment remains cautious, underpinned by the uneven pace of recovery, and concerns over a resurgence in the pandemic,” it says.
“Following significantly reduced profitability in 1HFY2020 and arising from a subdued operating environment, lower expected capital recycling, year-end revaluation that will be applied to the Group’s investment property portfolio, as well as impairment assessment for equity investments, CapitaLand’s financial performance for FY2020 will be materially adversely impacted,” it adds.
Shares in CapitaLand closed 6 cents higher or 2.4% up at $2.57 on Nov 3.
