CapitaRetail China Trust profit up 5.8% to S$74.36mn

The company expects growth to continue behind China’s strong retail consumption and sustained economic growth.

CapitaRetail China Trust Management Limited (“CRCTML”), the manager of CapitaRetail China Trust (“CRCT”), announced that CRCT achieved net property income (NPI) of RMB382.3 million (S$74.36 million) for FY 2010, up 5.8% against the previous year. Total income to be distributed in FY 2010 is S$52.2 million, an increase of 3.1% over FY 2009.

Total distribution per unit (“DPU”) for FY 2010 is 8.36 cents, an increase of 2.7% over FY 2009. Annualised distribution yield is 6.7% based on CRCT’s closing price of S$1.24 per unit on 25 January 2011, according to a CapitaRetail China Trust report.

Unitholders can expect to receive DPU of 4.15 cents for the six-month period from 1 July 2010 to 31 December 2010 on 25 March 2011. The book closure date is 10 March 2011.

Mr Victor Liew, Chairman of CRCTML, said, “China continues to be a global driver of economic growth. Its economy grew 10.3% in 20101 and is projected to grow 8.7% in 2011. China’s total retail sales of consumer goods increased by 18.4% in 2010 to reach RMB15.5 trillion. With rising disposable income, consumer confidence remains high and this will continue to support domestic demand. We are confident about the growth prospects provided by China’s strong retail consumption and sustained economic growth.”

Mr Tony Tan, CEO of CRCTML, said, “We delivered a strong set of results in FY 2010. Our portfolio occupancy rate at end-2010 was 98.1%, which is the highest ever achieved. We secured positive rental renewal rates for all our malls, with Wangjing Mall and Xinwu Mall registering double-digit rent increases of 12.2% and 10.9% year-on-year in FY 2010 respectively. With the exception of Qibao Mall which is undergoing tenancy adjustments, all our malls registered their highest revenue since CRCT’s IPO. Tenant sales3 for the full year grew 24.6% compared to a year ago and shopper traffic4 was up 15.4% to reach 54.2 million in 2010, putting us in a strong position to achieve higher revenue in 2011.”

“After completion of asset enhancement works, Saihan Mall’s NPI increased more than five-fold in FY 2010 compared to a year ago. Tenancy adjustments are underway at Qibao Mall to strengthen its trade mix. Popular Japanese fashion retailer Uniqlo and the first modern cinema in the Qibao vicinity have commenced operations in Qibao Mall late last year. We are confident that Qibao will start contributing more to the portfolio in the coming quarters.”

Revenue and Net Property Income in RMB Terms
Gross revenue for 4Q 2010 grew 6.3% year-on-year to RMB153.5 million due to occupancy and rental growth in Wangjing Mall, Xinwu Mall, Xizhimen Mall and Saihan Mall on post asset enhancement works. NPI declined 1.4% mainly due to increases in marketing and utility expenses, and higher provision for staff related costs.

Gross revenue for FY 2010 was RMB589.1 million, up 4.4% from FY 2009, mainly due to contribution from Beijing Hualian Supermarket that commenced operations in 4Q 2009 at Xizhimen Mall; and occupancy and rental growth at Wangjing Mall, Saihan Mall, Xizhimen Mall and Xinwu Mall. Higher gross turnover rent was recorded at Wangjing Mall, Saihan Mall and Xizhimen Mall. NPI for FY 2010 increased 5.8% over FY 2009 to reach RMB382.3 million. All malls registered NPI growth in FY 2010, except Qibao Mall which underwent tenancy adjustments. 

In SGD Terms
CRCT’s performance in SGD terms was affected by the stronger SGD against RMB in 4Q 2010 compared to 4Q 2009, and in FY 2010 compared to FY 2009.

In 4Q 2010, gross revenue increased 1.6% year-on-year to reach S$30.2 million. NPI for 4Q 2010 fell 6.1% year-on-year.

Gross revenue for FY 2010 decreased by S$1.3 million, or 1.1% over FY 2009. NPI for FY 2010 grew 0.2% compared to FY 2009.

Valuation
As at 31 December 2010, the total portfolio valuation was RMB6.1 billion, an increase of 5.8% or RMB338.0 million over the previous valuation as at 30 June 2010. The increase in valuation reflects the better performance of the malls in our portfolio.

Capital Management
CRCT secured refinancing of the S$200.5 million loan that matured in November 2010, extending the debt maturity to 2013 and 2014. CRCT will not face any major refinancing needs in 2011. CRCT’s only onshore facility is a term loan of S$38.5 million due to mature in 2011. Negotiations with financial institutions have commenced. As at 31 December 2010, CRCT’s total borrowing was S$402.0 million, with gearing at 31.1%.