Capitaretail China Trust (CRCT)

Capitaretail China Trust (CRCT): 2Q13 results in line; distributable income of $17.9m (+7.5% y/y) and DPU of 2.38¢ (-1.2%). Excluding the 57m units issued through private placement in Oct 2012, 2Q13 DPU would have been 2.58¢ (+7.1%). Implied yield of 6.5% based on 1H13 annualised DPU of 4.69¢. NPI rose 6.2% to $26.4m driven by strong rental reversion of 17.3%. Occupancy fell slightly to 97.1% with weighted lease to expiry of 5.3 years. Gearing lowered 1.9 ppts to 23.5% with average term of debt at 2.5 years and cost of debt of 2.58%. NAV of $1.47 (+4.4%) per unit brings CRCT's P/B to 0.98x according to last closing price of $1.45. The proposed acquisition on Grand Canyon Mall (Beijing) is expected to be completed by 2Q14. Grand Canyon Mall will add to its current portfolio of nine malls in China, of which four are in Beijing. Leases accounting for about 52.0% of the mall’s gross rent will be expiring from Jul 2013 to 2015, of which more than half are expiring this year. CRCT has elected to apply the Distribution Reinvestment Plan to the distribution for 1H13. In this first roll-out, CRCT will offer a 4.0% discount to the VWAP of 10 market days up to the books closure date on 12 Aug 2013. OCBC maintain its BUY rating with TP of $1.58 (under review); Bloomberg consensus has a 12-month TP of $1.73;