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CAPITARETAIL China Trust (CRCT) yesterday posted a net property income of $19.4 million for the second quarter ended June 30 - up 17.3 per cent from a year ago due largely to the strengthening yuan.
In yuan terms, net property income was 5.8 per cent higher than in Q2 2008.
Distributable income in Q2 rose 14.2 per cent year- on-year to $12 million. This translates to a distribution per unit (DPU) of 1.94 cents, exceeding the 1.70 cents a year ago.
Annualised DPU was 7.78 cents. Based on CRCT's closing unit price of $1.07 as of June 30, the annualised distribution yield was 7.3 per cent. The counter rose two cents yesterday to close at $1.23.
CRCT's performance has been fairly stable, notwithstanding slight falls in occupancies and new rents.
Its portfolio occupancy rate as of June 30 was 95.7 per cent, down from 97.1 per cent the same time last year. Rents secured for new leases and renewals fell 0.3 per cent below preceding rates.
Trust manager CapitaRetail China Trust Management CEO Wee Hui Kan expects rents to stay relatively flat in the second half of 2009.
Most retailers, while more optimistic than they were six months ago, are still cautious about committing to space, he said.
Prospects are likely to be brighter from 2010 on, he said. In the meantime, CRCT is prepared to be more flexible with lease terms, such as by offering leases of just one year to some tenants. The economic slowdown has also affected CRCT's portfolio valuation somewhat.
Its eight malls in China were valued at 5.62 billion yuan (S$1.18 billion) as of June 30. This is 0.9 per cent lower than half a year ago, partly because of more conservative rental projections.
CRCT's gearing at the end of Q2 was 33.6 per cent. The bulk of its borrowings will mature in 2010.
For the first half ended June 30, CRCT's income for distribution jumped 31 per cent from a year ago to $25.3 million. DPU for the period was 4.08 cents, 25.5 per cent more than that in H108.
Unitholders will receive a distribution of 4.08 cents per unit on Sept 25, for the six-month period from Jan 1 to June 30.
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