CapitaLand Retail China Trust - OCBC Investment 2020-04-27: On Path To Return To Normalcy

CAPITALAND RETAIL CHINA TRUST (SGX:AU8U) | SGinvestors.io CAPITALAND RETAIL CHINA TRUST (SGX:AU8U)

CapitaLand Retail China Trust - On Path To Return To Normalcy

  • Rebound in shopper traffic and tenants’ sales in March.
  • All malls and 90% of stores are open.
  • Portfolio occupancy remained healthy at 95.4%.



Signs of recovery in China

  • On same store basis, CapitaLand Retail China Trust (SGX:AU8U)’s tenants’ sales fell 54.8% y-o-y and shopper traffic was down 52.2% y-o-y in 1Q, weighed by COVID-19. See CapitaLand Retail China Trust Announcements. However, we see signs of recovery in March with shopper traffic and tenants’ sales jumping 105% m-o-m and 189% m-o-m respectively.
  • Management sees that the worst is probably over in China and expects operations to return to normalcy with shopper traffic to be progressively improving to the pre-COVID 19 level of 75% by end of 2Q. However, there is a potential risk of resurgence of infections in China. Should this happen, CapitaLand Retail China Trust’s operating metrics will likely remain under pressure in the near-term.


90% of stores reopened; remaining 10% are restricted business

  • All CapitaLand Retail China Trust's malls have reopened from 2 Apr with ~90% of stores opened as of 19 Apr. The remaining 10% which remain closed are largely in the business of leisure and entertainment e.g. cinema, KTV, gym and enrichment classes. They are considered restricted business and will remain closed until further notices from local governments. F&B businesses are open but not operating at their full capacity with continued social distancing.


CRCT plans to provide 1 month of rental rebate






Chu Peng OCBC Investment Research | https://www.iocbc.com/ 2020-04-27
SGX Stock Analyst Report BUY UPGRADE HOLD 1.44 DOWN 1.570



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