CapitaLand China Trust posts 1H21 net property income jumps 84 percent on business park portfolio acquisition

CapitaLand China Trust's 51 percent-owned Rock Square mall, located in Guangzhou in China. Credit: CapitaLand China TrustCapitaLand China Trust's 51 percent-owned Rock Square mall, located in Guangzhou in China. Credit: CapitaLand China Trust

CapitaLand China Trust reported Thursday its first half net property income climbed 84.4 percent on-year to S$120.34 million mainly on the new contribution from the business park portfolio, a 100 percent contribution from the Rock Square property and a new contribution from CapitaMall Nuohemule.

This was partially offset by the partially offset by the absence of revenue contribution from CapitaMall Minzhongleyuan and CapitaMall Saihan following their divestment, CLCT said.

CLCT, previously known as CapitaLand Retail China Trust (CRCT), added net property income got a further boost from a stronger operating performance at its malls, including lower tenant relief and as the business park properties saw higher rent collections and higher occupancy.

Gross revenue for the January-to-June period increased 74.2 percent on-year to S$176.89 million, the trust said in a filing to SGX.

Occupancy at the shopping malls improved to 95.4 percent as of end-June from 93.4 percent in the year-ago period, while tenant sales increased 40.8 percent on-year in the first half and shopper traffic rose 40.7 percent, CLCT said.

The business park portfolio occupancy increased to 94 percent as of end-June, from 91.5 percent at end-September 2020, above market levels, as China’s office community has returned after pandemic lockdowns, CLCT said.

DPU climbs

Despite an enlarged unit base, the distribution per unit (DPU) for the first half jumped 40.1 percent on-year to 4.23 Singapore cents, the trust said. The DPU is expected to be paid on 27 September.

The DPU yield is 6.2 percent on an annualised basis, based on the S$1.37 unit price on 1 July.

In yuan terms, first half net property income increased 78.3 percent on-year to 585.72 million yuan on gross revenue of 861.0 million yuan, up 68.5 percent on-year, CLCT said.

Positive outlook

The trust issued a positive outlook.

Tan Tze Wooi, CEO of the trust’s manager, pointed to China’s first half gross domestic product (GDP) growth of 12.7 percent and total retail sales growth of 23 percent.

“In view of effective pandemic control and rising vaccination rates in China, further normalisation of the country’s economic activities is expected, which will lead to the expansion of consumer demand and business investments,” Tan said in the statement.

“With a portfolio strategically aligned to China’s economic focus on domestic consumption and innovation to drive greater self-sufficiency, CLCT is well-positioned to ride the country’s growth over the long term,” Tan added.

Tan said CLCT is actively seeking acquisitions, with a focus on new economy asset classes, such as business parks, logistics, data center and industrial properties.

CLCT’s portfolio includes 11 shopping malls and five business park properties across 10 China cities; it has assets under management of S$4.4 billion.