10 Quick Things Investors Should Know About CapitaLand Retail China Trust’s Latest Earnings
Two weeks ago, CapitaLand Retail China Trust (SGX: AU8U) released its 2017 fourth quarter and full year earnings update. As a quick introduction, CapitaLand Retail China Trust 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.
Here are 10 things investors should know about CapitaLand Retail China Trust’s latest results:
1. Gross revenue for the reporting quarter declined by 4.6% year-on-year to S$54.11 million while net property income was reduced by 5.2% to S$32.99 million.
2. But, the distribution per unit (DPU) was flat year-on-year at 2.37 cents.
3. Based on CapitaLand Retail China Trust’s 2017 total DPU of 10.10 cents, and its closing unit price of S$1.59 as of 13 February 2018, the REIT has a trailing distribution yield of 6.4%.
4. As of 31 December 2017, the REIT’s gearing stood at 28.4%, which is a safe distance from the regulatory gearing ceiling of 45%.
5. The REIT’s portfolio had a committed occupancy rate of 95.4% at end-2017.
6. The weighted average lease expiry (by total rental income) was at 3.0 years as of 31 December 2017.
7. In the reporting quarter, the REIT’s average rental reversion rate was 4.8%.
8. Shopper traffic to the REIT’s malls was down 1.5% year-on-year in 2017’s fourth quarter. But for 2017, the REIT’s shopper traffic was up 4.7%.
9. In 2017, the REIT acquired Rock Square in Guangzhou, and sold CapitaMall Anzen in Beijing.
10. In its earnings release, CapitaLand Retail China Trust gave some commentary on the state of its market and business:
“In 2017, China’s GDP grew 6.9% year-on-year to RMB82.7 trillion, exceeding the central government’s target and the International Monetary Fund’s target of 6.8 as China continues its transition towards a more sustainable growth economy.
Consumption growth indicators remain on the uptrend with a 10.2% year-on-year increase in national retail sales to RMB36.6 trillion1, while national urban disposable income and expenditure per capita grew 6.5% and 5.4% respectively. Consumption contributed 58.8% to GDP growth in 2017 and remains a key economic growth driver.
According to the Chinese government’s think tank, the Institute of Industrial Economics of the Chinese Academy of Social Sciences, China’s stable growth momentum will continue into 2018.”