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3 Things Capitaland Retail China Trust’s Management Wants You to Know About Its Business

Capitaland Retail China Trust (SGX: AU8U), or CRCT, is a Singapore-based real estate investment trust (REIT) investing in retail real estate in China. The trust’s shopping malls are located in China, Hong Kong, and Macau.

The manager of CRCT gave a presentation on the REIT’s latest results, and in it, there were three slides I think investors should pay attention to.

Financial summary

Source: CRCT Result Presentation

It looks like the REIT delivered a mixed performance.

On the upside, both gross revenue and net property income (NPI) came in higher on a year-on-year basis, driven by higher rental growth and lower property expenses. Yet, distribution per unit (DPU) fell 5.8% year on year to 2.59 Singapore cents due to lower capital distribution this quarter. Excluding capital distribution, DPU would have increased 2.0% to 2.49 Singapore cents.

Occupancy rate

Source: CRCT Result Presentation

From the above, we can see that the overall portfolio occupancy rate has weakened on a year-on-year basis, driven primarily by the low occupancy rate at CapitaMall Minzhongleyuan, which is under stabilization. Excluding CapitaMall Minzhongleyuan, the overall occupancy rate would have improved over the last few quarter.

Portfolio expiry profile

Source: CRCT Result Presentation

CRCT’s portfolio weighted average lease to expiry was 5.1 years by net lettable area and 2.8 years by total rental income. Also, the staggered nature of CRCT’s lease expiry profile (based on total rental income) should provide earnings visibility in the next few years. Moreover, such arrangement reduces the REIT’s pressure in renewing the leases in any particular year since renewals are spread over a couple 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. The Motley Fool Singapore has a recommends Capitaland Retail China Trust.