Results of CapitaLand China Trust trigger relook at capital management

Goola Warden
Goola Warden7/28/2022 08:58 PM GMT+08  • 7 min read
Results of CapitaLand China Trust trigger relook at capital management
CLCT’s Grand Canyon mall in Beijing’s Fengtai district has a catchment population of 800,000 people within a three-km radius and is leased to tenants such as Carrefour, H&M and Chow Tai Fook
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Among the S-REITs and property trusts with Chinese assets, CapitaLand China Trust (CLCT) stands apart. Besides being the largest among this group, it is sponsored by a Singaporean company and is also the only REIT with a sound capital management strategy.

Sound assets, a diversified portfolio with diversified tenants, good tenant covenants coupled with stable cash flow, the ability to show decent interest coverage ratios and the lack of financial engineering are some of the metrics that bankers study in general when looking to finance or refinance properties.

On July 26, CLCT’s manager said it had refinanced all its debt due in FY2022 ending December. Since the manager staggers debt expiries with an average term to maturity of 3.1 years, only 7% of the total debt or $130 million is due this year. This has been refinanced with a $91.4 million unsecured offshore loan and a $58.6 million secured onshore loan, expiring in 2027. With this refinancing out of the way, CLCT’s manager has started to look at debt expiries in 2023.

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