Perennial China Retail Trust

Perennial China Retail Trust: Announced 3Q12 results which was in-line, supported by an earnout period. Distributable income at $10.7m and DPU of 0.97c was all in-line with grp initial guidance. Annualized yield translates to a yield of 7.9%. Operationally, at the Shenyang Red Star Macalline Furniture Mall, the mgt contract of furniture operator Red Star Macalline, who occupies approximately 60.0% of gfa at East Wing of the mall, was converted into a master lease on 1 Sept12 to enhance the income stability of PCRT. The Trustee-Manager is currently evaluating several offers received from various wholesale centre tenants for the West Wing of the mall, which has been dedicated to non-furniture trades as part of the restructuring exercise to reduce reliance on furniture or furniture-related trades. During the Period, the Shenyang Longemont Shopping Mall signed up new tenants such as Harson’s, Eamkevc, Westlink, Cool 7 and 好利来café. Well known cosmetic and skincare lines such as ZA, L’Oreal, Vichy and Kose have also set up counters on Level 1. However, in the short term, the operating performance of the Shenyang Red Star Macalline Furniture Mall and the Shenyang Longemont Shopping Mall is expected to remain challenging as both malls undergo major tenancy restructuring. Nevertheless, with available earn-out funds totalling RMB513.73m, it provides certainty to deliver the minimum target Total Amount Available for Distribution of RMB227.01m and the corresponding DPU of 3.861c for FY12.