CRCT's Q2 distributable income rises 30.4%

July 31, 2008
CRCT's Q2 distributable income rises 30.4%
By UMA SHANKARI

CAPITALAND unit CapitaRetail China Trust (CRCT) yesterday said that
its second-quarter distributable income rose 30.4 per cent to $10.5
million, from $8.1 million a year ago, on the back of a new
acquisition.

Distribution per unit (DPU) was 1.70 cents - the same as in Q2 2007.

CRCT decided to retain $900,000 of its income available for
distribution in Q2 2008 'to be prudent', it said. This is meant to
help negate the fluctuating income flow in the second half of 2008,
thereby providing unit-holders with stable half-yearly distributions
in 2008. If the trust had distributed 100 per cent of its income, the
DPU in Q2 2008 would have been 1.84 cents.

For the whole of the 2008 financial year, CRCT 'remains committed to
distribute 100 per cent of its income available for distribution',
the trust said.

Net property income for Q2 2008 was $16.6 million, an increase of
33.1 per cent over the $12.4 million recorded in the corresponding
three months in 2007 - partly due to income from Xizhimen Mall, the
newest addition to CRCT's portfolio.

The real estate investment trust (Reit), however, saw its net
property income for Q2 2008 come in slightly under its own forecast,
which it attributed to the strengthening Singapore dollar.

Net property income of $16.6 million was 0.5 per cent lower than the
forecast $16.7 million. But in yuan terms, the trust outperformed its
forecast. Net property income was 84.4 million yuan (S$16.9 million),
0.4 per cent higher than the forecast 84.1 million yuan.

For the first six months of 2008, CRCT's distributable income rose
26.8 per cent to $19.3 million, from $15.2 million for the
corresponding period in 2007. DPU for H1 2008 rose 1.2 per cent to
3.25 cents, from 3.21 cents a year ago.

The trust increased the occupancy at its malls to 97.1 per cent as at
June 30, 2008, from 95.6 per cent at the beginning of the year.

Lim Beng Chee, chief executive of CRCT's manager, acknowledged that
China's inflation rate, which is estimated to reach 6.5 per cent in
2008, is a concern.

But the trust is still confident of keeping operating expenses within
forecasts, he said.

'Most of our costs have been locked in earlier, so for 2008, we will
still be able to meet (earnings) forecasts,' Mr Lim noted. But the
cost of utilities, one of the biggest expenses for the Reit in China,
remains a concern, he added.

The trust's current $1.2 billion portfolio consists of eight retail
malls located in five cities in China.

CRCT's shares closed two cents down at $1.14 yesterday. The stock has
shed 47.0 per cent since the start of the year.