CapitaLand Retail China Trust announces 3Q DPU of 2.41 cents on higher distributable income

SINGAPORE (Oct 30): The manager of CapitaLand Retail China Trust (CRCT) has announced a 3Q18 DPU of 2.41 cents after accounting for an enlarged unit base, post CRCT’s Dec 2017 private placement to finance its joint acquisition of Rock Square.

The latest quarterly DPU represents a 1.7% increase from CRCT’s of 2.37 cents a year ago, or an increase of 8.6% when compared to 3Q17’s adjusted DPU of 2.22 cents.

Gross revenue for 3Q fell 1.1% to $55.35 million due to lower contributions from the trust’s multi-tenanted mall CapitaMall Grand Canyon, as well as its two malls under stabilisation, CapitaMall Minzhongleyuan and CapitaMall Wuhu.

Nonetheless, net property income (NPI) grew 2.2% to $36.7 million from $36 million a year ago, with the increase mainly attributed to broad-based rental growth and effective cost management.

Distributable income grew 10.5% y-o-y to $23.6 million from $21.4 million in 3Q17, underpinned by acquisitive growth rom Rock Square as well as organic growth from multi-tenanted malls.

As at end Sept, portfolio occupancy stood at 97.7% with rental reversion for the quarter coming in at 12.1%.

Commenting on the latest set of the results, Tan Tze Wooi, CEO of the manager, says CRCT’s growth in 3Q extends the positive momentum from its portfolio reconstitutions.

He believes long-term fundamentals remain strong in China, with the trust standing to benefit from China’s improving household income and rising consumer expectations.

Going forward, the CEO believes CRCT’s strong financial position will enable the pursuit of acquisition opportunities to drive new growth as its management continues with its active asset management strategy of extracting more value from existing properties.

“Through disciplined balance sheet management, we have completed all of CRCT’s refinancing requirements for 2018 and 2019 at competitive rates. About 83% of CRCT’s total debt is on fixed interest rates, providing certainty of interest expenses. To mitigate the impact of foreign currency fluctuations, as at 30 September 2018, we have hedged approximately 80% of CRCT’s distributable income into Singapore dollars,” says Tan.

Based on CRCT’s last closing price of $1.36 today, annualised distribution yield for 3Q18 was 7%.