CapitaLand China Trust (CLCT) reported a distributable income of $51.3 million in 1HFY2024 for the six months to June 30, down 18.5% y-o-y but up 1.1% h-o-h. This translates into a distribution per unit (DPU) of 3.01 Singapore cents on an enlarged unit base, down 19.5% y-o-y but up marginally h-o-h.
Net property income (NPI) in 1HFY2024 of RMB631.3 million ($116.82 million) decreased by 4.9% y-o-y mainly due to lower contributions from the logistics park and business park portfolio, mitigated by CLCT’s stronger retail performance.
The NPI for CLCT's nine retail assets grew 0.3% in 1HFY2024, a positive improvement considering there were 11 retail assets in the portfolio in 1HFY2023. On a like-for-like basis, the NPI of CLCT’s retail portfolio would have been up 6.1% y-o-y.
In addition, the retail portfolio NPI for 1HFY2024 increased by 3.7% over 2HFY2023. This growth was driven by broadbased improvements in operating metrics and higher contributions from malls that have completed asset enhancement initiatives (AEI).
For 1HFY2024, the strength of the Singapore dollar (SGD) against Renminbi (RMB) continued to impact foreign currency translation.
In the first half, CLCT’s retail portfolio occupancy increased to 97.8%. Majority of its retail assets recorded improved occupancy y-o-y. Rental reversion for 1HFY2024 was positive at 1.2%.
Shopper traffic across the retail portfolio grew 14.1% y-o-y while tenant sales rose by 6.6% y-o-y. This increase was primarily driven by the strong performance of its dominant malls and malls that recently completed AEI, including CapitaMall Yuhuating, Rock Square and CapitaMall Grand Canyon.
Occupancy of CLCT’s business parks increased from 90.2% as at March 31 to 90.5% as at end-June. Despite the influx in supply, the occupancy rate of CLCT’s three logistics assets advanced to an average 90.3% during the first half.
Chengdu Shuangliu Logistics Park’s occupancy improved three consecutive quarters to reach 81.1%. Including new leases signed in July, the logistics portfolio occupancy would be more than 91%.
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CLCT continued to maintain a strong balance sheet with a well-staggered debt maturity profile and diversified sources of funding. CLCT refinanced all loans due in FY2024 and secured refinancing for certain loans due in FY2025 and FY2026 at lower interest rates, ahead of their maturities.
As at end-June, thee average term to maturity of its borrowings was 3.4 years; cost of debt stood at 3.49% per annum; and interest coverage ratio stood at 3.2 times.
CLCT’s gearing remained stable from the previous quarter at 40.8%, well below the regulatory limit of 50%.
To mitigate interest rate risk exposure, 76% of CLCT’s total debt is on fixed interest rates. CLCT has increased the proportion of its RMB-denominated loan facilities to 27% of its total debt and is on track to further expand this proportion to 30% by the end of the year.
This move has enabled CLCT to capitalise on favourable onshore interest rates to effectively lower its overall cost of debt.
Units in CLCT closed flat at 68 cents on July 29.
