SINGAPORE (May 4): CapitaLand has warned that its 1Q2020 operating performance across Singapore, China, India, Vietnam, and the other countries it operates in, has been affected by the Covid-19 pandemic.

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The group did not report any overall financial figures as it has adopted the announcement of half-yearly financial statements with effect from the current FY2020. CapitaLand Limited’s next financial results announcement will be for the half-year period ending June 30.

CapitaLand will also conduct its property valuation on an annual basis instead of a half-yearly basis.

In its business update for 1QFY2020, the group says its trading results in China, its largest market, are beginning to pick up with “improved residential sales and shopper traffic”, after the country’s nationwide lockdown was loosened in March, and lifted in April. 

During the quarter, CapitaLand sold nearly RMB900 million ($180.4 million)worth of residential properties in China, with sales in March reported to be higher than the combined value of January and February, suggesting pent-up demand as the lockdown measures eased.

In Singapore, the group reported lower footfall in its residential show flats due to social distancing measures. Despite that, its Marine Blue project in Marine Parade was fully sold out as at March 31. The group’s other launched projects have also seen over 80% of its units sold.

An overall reduced number of shopper traffic in CapitaLand’s malls in Singapore, China, Japan, and Malaysia has led to lower retail sales and net property income (NPI) growth. In particular, shopper traffic in Singapore for 1Q2020 fell 10.8% y-o-y, due to circuit breaker measures from April 7.

The group’s lodging arm also suffered a 9% drop in fee income to $54.2 million in 1Q2020 due to the closure of over 30 lodging properties amidst the pandemic. This is in spite of its three new property openings in Singapore, France, and Japan in the same quarter.

In contrast, the group’s office and business spaces enjoyed an overall committed occupancy it calls “healthy” in 1Q2020 despite the containment measures owing to Covid-19.

Fund management fee income increased 54.2% to $76.5 million in 1Q2020. This was mainly contributed by CapitaLand’s newly-added Ascendas-Singbridge (ASB) portfolio. The group’s base fee of REITs and business trusts (BTs), and private equity (PE) funds are expected to be stable in the near term.

The group says it is in a strong position to address near-term uncertainty due to its well-equipped balance sheet with $13.0 billion in cash and available undrawn facilities. Its net debt-to-equity ratio was 0.64 times - still some way to go before hitting the 0.7 times internal benchmark. This implies CapitaLand has nearly $2.4 billion of implied debt headroom for potential liquidity needs and underwrite growth opportunities. 

It has continued to boost liquidity through $400 million in bilateral green loans in April 2020, which will catalyse greening of its global portfolio by 2030.

In its outlook, the group expects continued headwinds for its retail and lodging business in 2Q2020, due to social distancing and travel measures. While it expects its overall diversified portfolio to remain buoyant, the extent of the group’s financial impact will depend on the severity and length of the economic downturn, and its subsequent recovery.

The group’s 1Q2020 net asset value (NAV) per share rose 2% to $4.74 from FY2019’s $4.64. Its net tangible assets (NTA) per share rose 2% to $4.55 in the same quarter from FY2019’s $4.44. 

As at 9.13am, shares in CapitaLand are trading at 10 cents lower, or 3.3% down at $2.91.