CapitaLand Mall Trust NPI crashed 20.8% to $216.35m in H1

This was attributed to lower gross rental income arising from the rental waivers granted to tenants.

CapitaLand Mall Trust’s (CMT) net property income (NPI) dropped 20.8% YoY to $216.35m in H1 from $273.25m in 2019, an announcement revealed. Its revenue also fell 16.7% YoY to $318.39m over the same period.

Distributable income plunged 48.7% YoY to $109.72m in H1 from $214m, whilst distribution per unit (DPU) crashed 49% YoY to $0.0296 from $0.058 in 2019.

In Q2, NPI contracted 48.9% YoY to $68.05m from $133.15m in 2019, whilst revenue also fell 39.8% YoY to $114.09m from $189.54m. Distributable income for the quarter dropped 27.5% YoY to $78.13m, whilst DPU declined 27.7% YoY to $0.0211.

The decline in NPI was attributed to lower gross rental income arising from the rental waivers of $76.5m granted by CMT to tenants affected by the pandemic as well as lower gross turnover rent and car park income during the circuit breaker period. Meanwhile, the decline in gross revenue for H1 was partially mitigated by the new contribution from Funan’s retail and office components, which commenced operations at the end of June 2019.

As at 30 June, CMT’s average cost of debt was 3.1% and aggregate leverage was 34.4%. CMT has also put in place bank facilities for working capital requirements of FY 2020 and FY 2021.

Tony Tan, CEO of CapitaLand Mall Trust Management (CMTML), notes that CMT maintains a cautious view of near-term market conditions despite the Phase 2 of reopening, given the uncertain economic climate and softening demand for retail space.

“We have thus chosen to retain the balance $46.4m of taxable distributable income from Q1, after releasing $23.2m in Q2. In the meantime, we are sparing no effort to enhance operational efficiency and build greater resilience into CMT’s retail ecosystem in preparation for the eventual upturn,” he added.

He further notes that since the start of Phase 2 safe reopening until 5 July, average shopper traffic recovered to 53% of the level a year ago. The firm has also taken the necessary precautionary measures at its properties and introduced technological solutions to enhance safety.