Business

CapitaLand reviewing ways to improve malls

CapitaLand Mall Trust reports fairly flat second-quarter results


Amid challenging times in the retail sector, CapitaLand Mall Trust's (CMT's) manager is exploring ways to optimise operations across the malls in its portfolio, in anticipation of a pick-up in the economy.

The ways include reviewing the tenant mix for some malls, and undertaking property refurbishment where needed, the trust manager said yesterday, as it reported fairly flat second-quarter results.

"We are trying to prepare ourselves for the upturn... some of the malls are not operating at the most optimal level, so there are lots of opportunities for us to relook some of the plans," said Mr Tony Tan, chief executive of trust manager CapitaLand Mall Trust Management.Its revenue for the three months to June 30 fell by 1.3 per cent from a year ago to $168.6 million, owing to the redevelopment of Funan DigitaLife Mall, which shut in July last year.

Mr Tan, who took on the role of CEO in May, said 30 per cent of the lease for retail space at Funan has been committed.

Plans are afoot to enhance the competitiveness of CMT malls.

An upcoming cineplex near Bedok Mall offers the potential for extended trading hours.

He also said popular hotpot restaurant Hai Di Lao will be opening soon at Bedok Mall.

"We will focus on getting the right tenants in; they may not necessarily be the highest rents, but it is more important to get our mall in a competitive position," Mr Tan told a briefing yesterday.

Among its assets, Bedok Mall posted one of the weakest rental reversions - which refers to the change in rents upon lease renewal - at negative 7.4 per cent in the first half ended June 30.

It was negative 10 per cent at Westgate mall in Jurong East. The weaker rent growth in the two malls was partly due to bulk renewal of leases, CMT added.

CMT posted a modest 0.4 per cent year-on-year rise in shopper traffic across its portfolio in the first half, though monthly tenants' sales per sq ft were flat.

Responding to a question on the prospects for the food and beverage sector here in view of recent sales dips, Mr Tan said there may be too many of such offerings, resulting in stiffer competition.

Despite the lower revenue, second-quarter net property income climbed by 1.2 per cent year-on-year to $117.6 million.

That helped boost distribution per unit (DPU) for the quarter by 0.4 per cent year-on-year to 2.75 cents.

This took DPU for the first half to 5.48 cents - 0.2 per cent higher than the same period last year.

Net property income for the first half fell by 2.6 per cent from a year ago to $237.6 million, while gross revenue slipped by 2.9 per cent to $340.7 million.

"It is a patchy kind of outlook. I won't proclaim today that the consumers are back, but I think things have stabilised a little bit," Mr Tan said.

The counter closed three cents higher at $2.03 yesterday after earnings were announced.


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