Capitaland China Trust (CLCT) has reported net property income (NPI) of RMB264.2 million ($54.94 million) in its 1QFY2021 ended March business update.
This represents around 80% of the RMB382.6 million NPI recorded for the 1HFY2020.
The NPI was boosted by retail contributions from increased ownership of Rock Square to 100% (from 51% previously), new contribution from CapitaMall Nuohemule, and recovery in the retail segment, including "normalisation of operating margin" and reductions in lease restructuring and arrears cases.
Shopper traffic increased 52.1% y-o-y in the 1QFY2021, while tenant sales increased by 47.2% y-o-y.
In addition, CLCT’c business park assets also saw increased contributions from completed acquisitions of Ascendas Xinsu Portfolio, Ascendas Innovation Towers (AIT) and Ascendas Innovation Hub and stronger performance overall.
The acquisition of Singapore-Hangzhou Science & Technology Park Phase I and Phase II (SHSTP Phase I & II) is expected to be completed by 2Q 2021
SEE:CapitaLand China Trust posts 30.2% lower 2H20 DPU of 3.33 cents and 35.9% lower FY20 DPU of 6.35 cents
CLCT’s retail portfolio as of the 1QFY2021 has an occupancy of 94.4%, which the manager states is ‘above market’ and is higher on a q-o-q basis. Weighted average lease expiry (WALE) by gross rental income amounted to 2.3 years.
For the business parks portfolio, occupancy stood at 92.1% as of the 1QFY2021, with the manager stating ‘strong rental reversion’ was achieved to date. WALE by gross rental income stood at 2 years.
The manager expects positive rental uplift opportunities for AIT and SHSTP Phase I & II which are reaching their first and second leasing cycle and will be adjusted for higher market rent.
In terms of sector outlook, CLCT expects continued sector recovery and improving consumer sentiments to support its retail portfolio, noting that the leasing environment remains competitive on asking rent. However, any potential resurgence in Covid cases is expected to impact the rate of normalisation.
For its business parks, leasing demand is expected to remain robust, on the back of strengthening business confidence. CLCT also notes that high-tech industries are driving demand, in line with China’s macro government support policies.
The trust also says it is poised for its next stage of growth with the expansion of its investment strategy to include other asset classes such as integrated developments, commercial, industrial, logistics, and data centres.
Its long-term target asset mix comprises 40% integrated developments, 30% new economy assets and 30% retail assets, which the trust says will capture China’s “consumption-driven, higher-valued, service-led economy”.
Units in CLCT closed flat at $1.40 on April 26.
