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Tag: rock square

  • Tenant reshuffles bring good revenue for CapitaLand Retail China

    Tenant reshuffles bring good revenue for CapitaLand Retail China

    CapitaLand Retail China boosted its distributable income by 9.4 per cent last year on the back of a new acquisition and improved performance of multi-tenanted malls. CapitaLand Retail China Trust Management (CRCTML), the manager of CapitaLand Retail China Trust (CRCT), reported a distributable income of S$99.7 million (US$73.5 billion) for the year.

    “CRCT delivered a resilient set of results in FY2018 on the back of strong operating performance,” said CRCTML CEO Tan Tze Wooi.

    Portfolio occupancy as at December 31 was 97.5 per cent and rental reversion was 10.9 per cent. Tenants’ sales at its multi-tenanted malls grew by 18.8 per cent year on year, while shopper traffic was up by 19.4 per cent.

    With the addition of Rock Square in the full-year figures for the first time, CRCT’s investment property value rose by 17.8 per cent to RMB13.993 billion (US$2.07 billion) as at the end of the year.

    CRCTML chairman Soh Kim Soon said China’s retail sales rose by 9 per cent last year.

    “China’s more moderate pace of growth is reflective of an economy undergoing transition and its long-term fundamentals remain positive. We are confident that CRCT’s quality family-oriented shopping malls will continue to benefit from China’s growing middle class and policies implemented to stimulate the economy,” he said.

    Highlights of the year included:

      • CapitaMall Wangjing posted a rental reversion of 15.7 per cent after converting 4700sqm of anchor tenant space on Level 4 to specialty stores. The mall’s Level 8 rental income will rise by around 50 per cent after transforming 500sqm of common area into leasable space for coworking operator Ucommune.
      • CapitaMall Xinnan netted 17.9 per cent in rental reversion by reconfiguring its Basement 1 space to accommodate more popular brands.
      • Since acquisition, Rock Square has achieved four consecutive quarters of rental reversions above 20 per cent and a double-digit year-on-year increase in average sales per square metre for specialty stores.

    Wooi said that in order to further optimise the portfolio, CRCT has entered into a bundle deal in Hohhot with unrelated third parties to divest CapitaMall Saihan and acquire a new mall that is double in size and has “a longer balance tenure”.

    “Given the new mall’s higher growth potential, CRCT will be in an even stronger position to tap Hohhot’s promising retail growth. The deal is structured to minimise income disruption as the closure and divestment of CapitaMall Saihan will take place after the new mall is operational in the second half of the 2020 [financial year]. Supported by CRCT’s strong financial position, we will continue to explore suitable acquisition opportunities to grow and rejuvenate our portfolio,” Wooi concluded .

  • High occupancy pays off for CapitaLand China malls

    High occupancy pays off for CapitaLand China malls

    High occupancy rates of the CapitaLand China malls portfolio helped deliver a 10.5 per cent increase in distributable income in the three months to September. CapitaLand Retail China Trust Management Limited (CRCTML), the manager of CapitaLand Retail China Trust (CRCT), says income reached S$23.6 million this year, compared with $21.4 million the same quarter last year.

    CRCTML CEO Tan Tze Wooi said China’s retail sales rose 9.3 per cent year on year during the first nine months of this year to RMB 27.4 trillion (US$3.93 trillion), while urban disposable income and expenditure per capita grew 7.9 per cent and 6.5 per cent respectively.

    “China is now growing from a larger base and its long-term fundamentals remain strong,” he said. “With our quality portfolio of malls offering holistic lifestyle experiences, CRCT will stand to benefit from China’s improving household income and rising consumer aspirations.”

    During the latest quarter, CRCT achieved a 2.2 per cent increase in net property income to $36.7 million, driven by broad-based rental growth and effective cost management.

    Wooi said the trust’s portfolio achieved an occupancy rate of 97.7 per cent at the end of September and rental reversion was “a robust 12.1 per cent”.

    “Our active asset management strategy with a tailored approach for each mall is progressing well. Rock Square registered a strong positive rental reversion above 20 per cent for the third consecutive quarter by bringing in 25 prominent international and domestic brands, many of which are new-to-market in Haizhu District.

    “To differentiate CapitaMall Qibao’s offerings, we increased its exposure to the resilient learning and education sector by more than three times over the last five years. We also expanded the rooftop playground to host more interactive activities that are popular with children, further enhancing CapitaMall Qibao’s attractiveness to young families.”

    CRCT is the first China shopping mall Real Estate Investment Trust (Reit) in Singapore, with a portfolio of 11 shopping malls: CapitaMall Xizhimen, CapitaMall Wangjing, CapitaMall Grand Canyon, CapitaMall Shuangjing in Beijing; Rock Square in Guangzhou; CapitaMall Xinnan in Chengdu, Sichuan Province; CapitaMall Qibao in Shanghai; CapitaMall Minzhongleyuan in Wuhan, Hubei Province; CapitaMall Erqi in Zhengzhou, Henan Province; CapitaMall Saihan in Hohhot, Inner Mongolia; and CapitaMall Wuhu in Wuhu, Anhui Province.

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  • CapitaLand and CRCT to jointly acquire 100% interest in company that owns Rock Square

    CapitaLand and CRCT to jointly acquire 100% interest in company that owns Rock Square

    CapitaLand and CapitaLand Retail China Trust (CRCT) have formed a joint venture to acquire all the shares in a company that owns an operational shopping mall, currently known as Rock Square, located in Haizhu District in
    Guangzhou. CRCT is the majority shareholder with a 51% stake in the joint venture, while CapitaLand owns the remaining 49%. This marks CapitaLand’s second mall and CRCT’s first in Guangzhou, the provincial capital of Guangdong Province in South China and one of four first-tier cities in China.

    Total purchase consideration payable is about RMB3,360.7 million (about S$688.9 million), which includes but is not limited to the company’s interests in Rock Square with an agreed value of RMB3,340.7 million (about $684.8 million). The transaction is expected to be completed by 1Q 2018.

    Rock Square is one of the largest malls in Haizhu District with a gross floor area (GFA) excluding car park of about 83,591 sq m. Surrounded by densely populated residential estates, the mall caters to about 800,000 residents from middle- and high-income households within a three-kilometre radius. The mall is directly connected to Shayuan metro station, which serves Line 8 that links Guangzhou’s eastern and western areas, and
    Guangfo Line that connects Guangzhou with Foshan. The planned extension of Line 8 and Guangfo Line by 2019 is expected to increase the mall’s population catchment.

    Mr Jason Leow, CEO of CapitaLand Mall Asia, said: “China is an important core market to CapitaLand. We continue to invest in our China shopping mall business under our ‘core city clusters, dominant assets’ strategy, which focuses on strengthening our presence in five city clusters with quality assets that command a dominant market position. Given Rock Square’s significant scale and strategic location with excellent transport links, the acquisition presents a rare opportunity to increase our exposure to the high-growth retail market in a first-tier city.

    As an operational mall with upside potential, the acquisition will also help CapitaLand to increase our recurring income base as we continue to expand our business.”

    Mr Leow added: “When completed, the acquisition will boost CapitaLand’s retail presence in Guangzhou, where we currently own and manage CapitaMall SKY+, which opened in 2015. By leveraging on our experienced team in Guangzhou to manage the new mall, we will be able to benefit from the network effect of an enlarged portfolio.”
    Mr Tan Tze Wooi, CEO of CapitaLand Retail China Trust Management Limited, said: “The acquisition marks CRCT’s strategic entry into another first-tier city after Beijing and Shanghai.

    It represents a progression of our portfolio reconstitution strategy, whereby capital from the sale of CapitaMall Anzhen is recycled into a multi-tenanted mall with a longer balance tenure and stronger growth potential. The addition of Rock Square serves to diversify CRCT’s tenant base and improve the quality of earnings by increasing our exposure to more varied and higher-yielding trade categories. Post-completion, the accretive acquisition will boost CRCT’s portfolio size by about 28% to approximately RMB15.1 billion (about S$3.1 billion).”

    Mr Tan added: “In view that leases accounting for over half of the mall’s total rent are up for renewal between 2018 and 2020, the timely acquisition will present us with a window of opportunity to achieve rental uplift through active tenant mix adjustments, unit reconfiguration and improvements to the layout. This is supported by the mall’s current mix of popular retailers, which serves as a strong base to attract more quality brands to enhance
    the overall shopping experience. Coupled with the cost synergies from working with our sponsor CapitaLand to manage the mall, we are confident of driving the growth of Rock Square and turning it into a significant contributor to our overall performance.”

    Opened in 2013, Rock Square is a five-storey shopping mall with three levels above ground and two basement levels. Positioned as a modern and trendy retail destination offering a wide range of fashion, F&B, children-oriented and entertainment options, the mall houses well-known international brands such as AEON, UNIQLO, ZARA and Victoria’s Secret. As at June 2017, the mall was 96.4% committed.

    The mall is located in Haizhu District, Guangzhou’s second most populous urban district that also ranks high in terms of disposable income per capita4. A popular residential area for Guangzhou’s new affluent class, Haizhu District is home to the Creative Industry Zone (where leading technology firms such as Tencent are based), the city’s landmark Canton Tower and top tertiary institution Sun Yat-sen University.

    Guangzhou is the most populous city of Guangdong Province with a population of 14 million. It is an important communications and transportation hub in South China with a flourishing high-tech industry. In 2016, Guangzhou’s GDP grew 8.2% year-on-year, outpacing the national average of 6.7%. In the same period, both disposable income per capita rose and total retail sales rose by 9.0%. These positive indicators are expected to see further growth support, as Guangzhou transforms into a major commercial centre in South China with a
    fast-evolving retail scene and an increased emphasis on driving domestic consumption.

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