Dip fails to dent growth year for CRCT

While it ended the year on a high note, mall owner CapitaLand Retail China Trust Management (CRCT) weathered a dip in the final quarter.

Net property income (NPI) rose 9.1 per cent for the year, but dropped 5.2 per cent to S$33 million (US$25 million) for the last quarter year on year. Gross revenue for the three months shrank 4.6 per cent to $54 million.

CRCT attributes the revenue decline mainly to the divestment of CapitaMall Anzhen on July 1, and lower revenue from CapitaMall Grand Canyon because of trading being disrupted by an operational review by authorities.

For the year, CRCT’s manager CapitaLand Retail China Trust Management (CRCTML) says the rise in the group’s NPI of RMB730.6 million (US$116 million) for the 12 months to the end of December was driven mainly by the first full-year contribution from CapitaMall Xinnan, which was acquired at the end of September in 2016, and rental growth from its other multi-tenanted malls.

“China’s economy performed better than expected last year and consumption remains a key economic growth driver,” says CRCTML chairman Soh Kim Soon. “We are positive CRCT’s portfolio of family-oriented shopping malls is well placed to tap China’s sustainable growth, rising disposable income and increasing consumer spend.”

During the year, CRCT’s portfolio was strengthened through a reconstitution strategy, says CRCTML CEO Tan Tze Wooi.

“We unlocked the value of master-leased CapitaMall Anzhen and acquired multi-tenanted Rock Square in Guangzhou, which has a longer balance tenure and stronger growth potential. The acquisition marks our diversification into another first-tier city, and creates new leasing synergies. We expect Rock Square to be a significant driver of growth.

“We are also making good progress in transforming the recovered space at CapitaMall Wangjing into higher-yielding specialty stores.”

He says the space is already more than 90 per cent committed and is on track top open progressively from June.
CRCT’s portfolio comprises 10 malls, primarily in China and including CapitaMall Qibao in Shanghai.

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