How will the CapitaMall Anzhen sale impact CRCT's profits?

CapitaMall Anzhen contributed 8.4% to H1 net property income.

CapitaLand Retail China Trust (CRCT) finished the sale of CapitaMall Anzhen on 14 September, revoking its status as a wholly owned subsidiary.

According to OCBC Investment Research, there will be a loss in income contribution following the divestment. The retail mall contributed 10% of net property income (NPI) in 2016 and 8.4% in H1.

There will be a top-up from the proceeds in Q4 and next year for any lost income.

However, OCBC saw more positive catalysts for CRCT's distribution per unit (DPU) growth.

Contributions from CapitaMall Wangjing are expected to increase from 2Q2018 as it expands the proportion of non-anchor net leasable area (NLA) from 50% to 60%, following the recovery of space from BHG.

The recovery in CapitaMall Minzhongleyuan, following the reopening of Zhongshan Avenue and commencement of Metro Line 6 in Wuhan, is also expected to result in higher contributions.

However, it will not be as quickly as initially expected, because CRCT has been selective towards tenants in view of long-term success.

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