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CapitaLand China Trust - OCBC Investment 2022-04-27: Diversification Pays Off

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

CapitaLand China Trust - Diversification Pays Off

  • CapitaLand China Trust plans to provide 0.2 months of rental relief.
  • 4.1% exposure to Greater Shanghai by AUM.
  • Flat/+6.5% rental reversion for Retail/New economy portfolio.



Shopper traffic fell 7.1% y-o-y while tenants’ sales grew by 0.3% y-o-y

  • CapitaLand China Trust (SGX:AU8U) announced its 1Q22 business update. Shopper traffic improved 6% year-over-year (YoY) in Jan and Feb 2022 but was impacted by the resurgence of COVID-19 cases in Mar 2022. Consequently, shopper traffic declined 7.1% y-o-y while tenants’ sales grew marginally by 0.3% y-o-y in 1Q22.
  • In light of the COVID-19 situation in China, CapitaMall Aidemengdun, Qibao and Xuefu, totalling ~9% of asset under management (AUM) were closed in 1Q22 and will reopen when local conditions permit.
  • CapitaLand China Trust plans to provide rental relief of 0.2 months equivalent of gross rental income to its affected retail tenants (~0.3 months provided in FY21) and also seek to file insurance claims to partially offset the cost of closure.


Positive rental reversions of 6.5% for New Economy portfolio

  • For CapitaLand China Trust’s New Economy portfolio, all business parks remained open with no impact on the operations. Activities at two of CapitaLand China Trust’s logistics were paused, in line with the lockdown in Shanghai, but CapitaLand China Trust continues to receive full rental payments.
  • As of 31 Mar 2022, occupancy rate of business parks dipped slightly by 1.5 percentage points (ppt) quarter-over-quarter to 94.7%. On the other hand, logistics park occupancy grew marginally by 0.2 ppt q-o-q to 97.6%.

New Economy portfolio remained resilient






OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2022-04-27
SGX Stock Analyst Report BUY MAINTAIN BUY 1.40 DOWN 1.560



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