CRCT’s 2Q 2018 distributable income rises 10.0%
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CapitaLand Retail China Trust Management Limited (CRCTML), the manager of CapitaLand Retail China Trust (CRCT), announced today that it registered distributable income of S$25.7 million for the period 1 April to 30 June 2018 (2Q 2018), an increase of 10.0% from S$23.3 million a year ago.
The stronger performance was boosted by the first full-quarter contribution of Rock Square. Distribution per unit (DPU) for 2Q 2018 was 2.64 cents on an enlarged unit base, representing an increase of 0.8% from 2.62 cents in 2Q 2017, and 8.2% higher than 2Q 2017’s adjusted DPU of 2.44 cents following CRCT’s private placement exercise in December 20171.
For the period 1 January to 30 June 2018 (1H 2018), distributable income was S$52.4 million, an increase of 9.8% compared to the same period last year. DPU edged up 0.6% from a year ago to 5.39 cents. On a comparable unit basis1, DPU for 1H 2018 would have been 7.8% higher than 1H 2017’s adjusted DPU of 5.00 cents.
Based on an annualised DPU of 10.59 cents and CRCT’s closing price of S$1.54 per unit on 26 July 2018, the annualised distribution yield for 2Q 2018 was 6.9%. Unitholders can expect to receive their DPU for 2Q 2018, along with DPU for 1Q 2018, on 20 September 2018.
“In 2Q 2018, CapitaMall Wangjing completed the transformation of the recovered space on Level 4 with 19 of the 23 new retailers opened as at June 2018.”
Mr Tan Tze Wooi, CEO of CRCTML, said: “We are pleased that our portfolio reconstitution efforts and proactive asset management are showing positive results, delivering a double-digit growth for 2Q 2018’s distributable income. Rental reversions at our core multi-tenanted malls for the quarter averaged a healthy 10.5%, while portfolio occupancy as at 30 June 2018 was resilient at 97.4%.”
He also added: “Since acquiring Rock Square on 31 January 2018, we have focused on extracting the lease renewal upside while enhancing the mall’s tenant mix. This strategy led to strong rental reversions at Rock Square averaging above 20% for the second consecutive quarter. New entrants in the mall include a digital experience store by Xiaomi and popular beverage store Nayuki Tea. To optimise Rock Square’s layout and further expand its offerings, we created over 500 square metres of retail space by converting unutilised space and adding retail kiosks.”
In 2Q 2018, CapitaMall Wangjing completed the transformation of the recovered space on Level 4 with 19 of the 23 new retailers opened as at June 2018. r Tan Tze Wooi explained:”the new retail zone, which offers a strong mix of lifestyle and experiential retail tenants that host crowd-pulling events, is expected to drive footfall and improve sales for the entire floor with positive spillovers for the rest of the mall. The early recovery of the former anchor tenant space, executed within timeline and budget, demonstrates our proactive asset management approach to strengthen the appeal of CRCT’s malls.”
“During the quarter, we early refinanced S$150 million of loans ahead of maturity in 2019 to lock in favourable rates. In addition, we undertook our maiden issue of S$130 million medium term notes (MTN) under CRCT’s S$1 billion MTN programme, which was well-received by debt investors. Diversifying our funding sources to the debt capital market is part of our capital management strategy to harness greater financial flexibility for our next phase of growth as we actively source for strategic acquisitions to expand our portfolio. As at end June 2018, CRCT’s gearing was a healthy 32.1%, well below the regulatory limit of 45%,” he concluded.
Questions & Answers
Q.What is the reason for the increase in CRCT's distributable income in the second quarter of 2018?
What is the reason for the increase in CRCT's distributable income in the second quarter of 2018?
The stronger performance was boosted by the first full-quarter contribution from Rock Square. The company's portfolio reconstitution efforts and proactive asset management also contributed positively.
Q.How did CRCT improve the performance of Rock Square after its acquisition?
How did CRCT improve the performance of Rock Square after its acquisition?
CRCT focused on extracting lease renewal upside and enhancing the tenant mix, leading to strong rental reversions. New retail space was also created by converting unutilised areas and adding retail kiosks.
Q.What initiatives did CRCT undertake to manage its capital during the quarter?
What initiatives did CRCT undertake to manage its capital during the quarter?
CRCT early refinanced S$150 million of loans to lock in favourable rates and issued S$130 million in medium term notes. This diversified funding sources to the debt capital market.
Q.What was the average rental reversion for CRCT's core multi-tenanted malls in 2Q 2018?
What was the average rental reversion for CRCT's core multi-tenanted malls in 2Q 2018?
The rental reversions at CRCT's core multi-tenanted malls averaged a healthy 10.5% for the second quarter of 2018. Portfolio occupancy stood at 97.4% as of 30 June 2018.
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