CRCT net property income up 15%

Company management foresees continued growth as it banks on the slew of measures by China to boost domestic consumption.

CapitaRetail China Trust’s (CRCT) net property income for 2Q 2012 was RMB124.4 million, up 15.0% from the RMB108.1 million for 2Q 2011, according to a release from CRCT.

The property REIT also announced that its distribution per unit (DPU) for 2Q 2012 was 2.41 cents, an increase of 12.1% over the 2.15 cents for the same quarter last year.

“We remain positive about the growth prospects in China. The Chinese government has been taking proactive steps to boost domestic consumption as a pillar of economic growth. As one of the first measures to boost domestic consumption, the Chinese government allocated RMB26.5 billion to stimulate buying of  energy-saving household appliances in June 2012," said Mr Victor Liew, Chairman of CapitaRetail China Trust Management Limited (CRCTML), the manager of CRCT.

"Interest rates were lowered a second time this year on 6 July 2012 with the one-year lending rate now at 6.0%, a further cut of 31 basis points from the last reduction last month. Inflation also eased to 2.2% in June 2012. The country’s economic fundamentals remain strong as both its urban disposable income per capita and number of middle-class households continue to grow," he said.

"We are therefore confident that the China retail sector will continue to offer opportunities for growth," he added.

For his part, Mr Tony Tan, CEO of CRCTML said: “In 2Q 2012, CRCT’s gross revenue increased 18.2% to RMB190.2 million, while shopper traffic and tenant sales across our multi-tenanted malls increased by 26.4% and 13.1% respectively. We achieved strong rental reversions of 15.2%. CapitaMall Xizhimen in Beijing achieved the highest rental reversion of 28.9% on the back of a 52.1% increase in shopper traffic year-on-year in 2Q 2012, following the opening of the Basement 1 connection to the subway. We see further growth potential in the mall through the fine-tuning of tenant mix. Thus, we will be bringing in more international fast fashion. 1 brands such as Urban Renewal and UNIQLO to CapitaMall Xizhimen that will attract more shopper traffic and generate higher revenue.”

“For the quarter under review, CRCT’s NPI also grew 15.0% to RMB124.4 million, continuing our strong double-digit NPI growth momentum year-on-year. CapitaMall Saihan in Huhhot, Inner Mongolia, registered the strongest NPI growth of 38.2%. Since its transformation into a multi-tenanted mall in 2010, CapitaMall Saihan has achieved robust growth momentum and its occupancy was almost full at 99.7% as of June 2012. This reflects the effectiveness of our asset management strategy as we constantly optimise our portfolio mix, implement innovative asset enhancement initiatives and pursue suitable acquisition opportunities that will further enhance our portfolio," he added.