CapitaLand's mall traffic in China rebounds despite closures

Shopper traffic recently rose to 40-50% of the pre-COVID-19-outbreak levels.

CapitaLand has closed 12 of its malls in China, with four of these being in Wuhan. According to a note from OCBC Investment Research, the picture is not entirely drastic, however, as its shopper traffic in China rebounded to 40-50% of the pre-outbreak levels after plunging by as much as 80-90%.

Its Singapore operations are also affected. Footfall dipped by around 50% for its malls during the weekend after DORSCON was raised to Orange, but has now moderated to a 5% decline instead.

“Management announced a number of relief packages to support its mall tenants. This will have a near-term impact on its margins, in our view, but will go a long way in establishing stronger relationships with its tenants in the long run,” OCBC Investment Research commented.

CapitaLand’s lodging business provides a contrast to its retail counterpart. Occupancy in Singapore has hovered around 70%, above industry levels due to its more defensive longer-stay business model.

In China, occupancy for its hospitality assets in Tier-1 cities are also around the 70% level, but was weaker at 40% for the rest of its portfolio in the lower tier cities.