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3 Slides That Investors Should See From CapitaLand Retail China Trust’s Latest Results Presentation

CapitaLand Retail China Trust (SGX: AU8U) is a Singapore-based REIT that invests in retail malls in China. The REIT’s 10 malls are located in seven of China’s cities. Recently, the REIT has released its full year results for the year ending December 2017 (FY17).

In this article, we will take a look at three useful slides from its latest presentation.

The first slide shows a summary of CapitaLand Retail China Trust’s income statement for 2017:

Source: CapitaLand Retail China Trust’s results presentation

Overall, we can see that that there was growth across the board, albeit uneven.

Higher revenue was driven the full year contribution from CapitaMall Xinnan, and rental growth from its core multi-tenanted malls. Growth was partially offset by lower revenue from CapitaMall Qibao due to competition, and the loss of contribution from CapitaMall Anzhen with effect from 1 July 2017.

On our next slide, we take a look at the occupancy rate of its malls.

Source: CapitaLand Retail China Trust’s results presentation

From the above, we can see that the portfolio occupancy rate as at 31 December 2017 was slightly lower both in a year-on-year, and a quarter-on-quarter comparison. Unfortunately, most malls showed slightly declines in occupancy, except for CapitaMall Xizhimen, CapitaMall Grand Canyon, and CapitaMall Saihan.

Finally, we take a peek into the REIT’s lease expiry profile.

Source: CapitaLand Retail China Trust’s results presentation

As at December 2017, CapitaLand Retail China Trust had a weighted average lease to expiry (WALE) of 5.5 years by net lettable area, or a WALE of 3.0 years by total rental income.

One positive point from the above is the staggered nature of the REIT’s lease expiry profile (in terms of total rental income) for the next few years. The nature of such arrangement should reduce pressure on the REIT to renew its leases as it is spread over a number of years.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.