Capita Retail China Trust

Capita Retail China Trust: 4Q14 DPU rose 12.7% y/y to 2.48¢, while distributable income grew 15.6% to $20.5m, bringing full year DPU and distributable income to 9.82¢ (+8.9%) and $80.9m (+15.4%) respectively. For the quarter, revenue jumped 27.7% to $52.7m, while NPI expanded 30.1% to $33.5m, due to new contributions from CapitaMall Grand Canyon and rental growth from other multi-tenanted malls, offset by lower revenue from CapitaMall Wuhu where tenancy adjustments are ongoing. For the quarter, portfolio reversions were 20.6%. Occupancy was 95.9 (-1.7ppt q/q) due to abovementioned frictional adjustments, with WALE by rental income of 6.7 years. Aggregate leverage stood at 28.7% with all-in interest cost of 3.32%. Shopper traffic fell 5.3% q/q (-0.5% y/y), though average monthly sales rose 13.3% q/q (+21.3% y/y) in the quarter Spending trends in Beijing, Shanghai and Wuhan remains momentous, and management has been actively optimizing tenant space by attracting strong retailers to boost shopper traffic. For CapitaMall Minzhongleyuan, a road closure has continually impacted accessibility to the mall. That said, accessibility is enhanced when a new subway line becomes operational in 2016. CRCT is trading at 1.1x P/B and 5.7% annualized 4Q14 yield.