x 0

Below ipo price 93cts..despite Temasek has a large stake in it..was lucky to get out on first day of ipo trading..price shot up past $1.14 as a substantial fund mgr bought into it

tiny76 ( Date: 05-Aug-2013 08:13) Posted:

GCC distribution is on semi annual basis.

x 0

GCC distribution is on semi annual basis.

x 0

never announce dividend = lousy counter = dump?? nobody teaches me that but u...lol...

x 0

Lousy counter. Dump it

x 0

Hahahahahah!!!!!!!!

john_ric ( Date: 31-Jul-2013 09:47) Posted:

how come no dividend (no CD) ??

lousy

x 0

Lousy lo.. why no dividend?

john_ric ( Date: 31-Jul-2013 09:47) Posted:

how come no dividend (no CD) ??

lousy

x 0

time to buy in

x 0

maiden set of results since listing, distributable income of $46.1m and DPU of 1.73¢ are both 8.3% above its IPO forecast of $42.6m and 1.60¢ respectively. NPI of $59.7m was 7.4% above IPO forecast and gross revenue was $73.8m (+3.4%). This was due to strong rental reversions achieved from Festival Walk (+21%) and Gateway Plaza (+86%). Overall occupancy of 98.3% contributed by robust tenancy of 99.1% at Festival Walk and Gateway Plaza at a stable 97.8%. Average weighted lease to expiry of 2.7 years. Gearing of 41.5% with average debt maturity of 4 years and cost of debt of 2%. The two properties will continue to benefit from the positive demand dynamics in Greater China, given the resilient domestic demand in Hong Kong and organic rental reversions. MGCCT targets organic growth through asset enhancements in the form of kiosks, to provide additional rental income from the space, as well as organizing marketing and promotion activities to increase its footfall. MGCCT currently trades at an implied FY13 annualized yield of 5.8%.

x 0

how come no dividend (no CD) ??

lousy

x 0

Magic!!!

x 0

I don't think it will affect GCC to go up..

newbie888 ( Date: 30-Jul-2013 22:35) Posted:

despite the measure in China, MCCT first financial result beat forecast by 8.3%!! Cheers

x 0

despite the measure in China, MCCT first financial result beat forecast by 8.3%!! Cheers

x 0

This one is still considered undervalue and have yearly good dvd

milen_00 ( Date: 12-Jul-2013 08:59) Posted:

Time to vest more and good for reits now

CitizenBeng ( Date: 02-Jul-2013 17:28) Posted:

Chinese Malls Waive Rents as Vacancies Loom: Real Estate

By Bloomberg News - Jul 2, 2013

Chinese landlords are forgoing rent and paying to outfit stores for mass-market fashion brands including Zara and H& M, a bid to blunt the impact of a boom in shopping-mall construction that threatens to push up vacancies.

Preferential leasing terms were reserved until recently for luxury brands such as Louis Vuitton and Gucci, which are coveted because they bring shoppers into malls. Now moderately priced labels are being enticed with offers as landlords work harder to fill shops, according to Cushman & Wakefield Inc. and RET Property Consultancy Ltd.

Consumer demand is cooling as China’s economy slows and President Xi Jinping reins in lavish spending by officials. Big mall operators, including China Resources Land Ltd. (1109) and Hang Lung Properties Ltd. (101), can withstand the slowdown at the expense of smaller ones such as Golden Eagle Retail Group Ltd. (3308), according to Credit Suisse Group AG and Haitong International Securities Ltd. Landlords focused on lower-tier markets will be under more pressure as smaller cities add retail space at a faster rate than larger ones.

“Competition in China’s commercial property market is very fierce, especially at those new malls at non-central locations in second- and third-tier cities,” said Carrie Liu, Shanghai-based general manager for development at Shui On Development Ltd., a subsidiary of Shui On Land Ltd (272). The company, which built the city’s Xintiandi restaurant, bar and retail district, has never offered subsidies such as free rents, Liu said.

Mall Building

Chinese developers built more malls and expanded into smaller cities as consumer spending and incomes grew, elevating China’s economy to the largest in the world after the U.S.

Half of the 32 million square meters (344 million square feet) of shopping centers under construction around the world are in China, according to CBRE Group Inc. (CBG) About 21 million square meters of retail space is expected to be completed by next year, a 38 percent increase in supply, according to broker Cushman, which tracks 20 cities in China.

That’s setting up a test for developers as retailers including LVMH Moet Hennessy Louis Vuitton SA (MC) and Gucci-owner Kering SA (PP) respond to slowing growth by scaling back expansion plans in the world’s most populous country.

Second-tier cities, including Chengdu, Shenyang, Hangzhou and Qingdao, may be stuck with the highest vacancy rates in 2014, according to Cushman. The financial hub of Shanghai, the capital Beijing and the southern industrial cities of Guangzhou and Shenzhen are considered the first-tier cities.

Vacancy rates in some less affluent cities could surge to more than 30 percent by next year from as low as 6.8 percent in the first quarter this year, Cushman forecasts.

Large Developers

“The problem we see today in China is that there’s really no proper planning,” Sigrid Zialcita, Singapore-based managing director for Asia-Pacific research at Cushman, said in a phone interview. “There are really a number of cities prone to having periods of oversupply.”

Mall space in China’s four major cities will grow about 40 percent by the end of 2015, while in 16 smaller cities it will double in the period, according to Steven McCord, China retail research director at property brokerage Jones Lang LaSalle Inc. (JLL)

Developers of some new malls may struggle to reach even 70 percent occupancy, forcing delays in opening, said Michael Zhang, executive director and co-founder of Beijing-based RET Property Consultancy.

Best Positioned

In developed markets such as Hong Kong and Singapore, vacancy rates are between 6 percent and 7 percent because of a shortage of supply, according to Cushman.

“Free rent can exist in any market where the tenants have the advantage,” McCord said. “China’s characteristics are that there’s a lot of new construction and there is so much new supply.”

Hong Kong-based China Resources Land has the best mall locations and highest internal rate of return on its mature malls at about 20 percent, among five major operators from outside the mainland, including Hang Lung and CapitaMalls Asia Ltd (CMA)., according to Credit Suisse. It rates state-owned China Resources Land outperform with a 12-month price target at HK$29.80. The stock closed at HK$21.20, up 4.2 percent, in Hong Kong on June 28.

While “it may be debatable whether China’s housing market is oversupplied, there’s consensus that China’s commercial property sector is indeed,” said Jinsong Du, a Hong Kong-based property analyst at Credit Suisse. “Bigger mall developers definitely outperformed those smaller ones.”

Two calls to Annie Li, Hong Kong-based investor relations director at China Resources Land, weren’t answered.

Hang Lung

Hang Lung, based in Hong Kong, is investing more than $8.5 billion building malls in China, a bet by Chairman Ronnie Chan on an expanding middle class. Fifteen of 23 analysts recommend buying the stock, according to data compiled by Bloomberg. Elisa Fong, assistant manager of Hang Lung’s corporate communications, declined to comment.

Brokerage Maybank Kim Eng raised its earnings forecast for CapitaMalls Asia for the fiscal years 2013 to 2015 by 5 percent to 10 percent, and reiterated a buy recommendation in an April report, with a 12-month price target of S$2.57. The developer closed at S$1.795 yesterday. The Singapore-based company will continue to look for opportunities and expand in China to “leverage its market leadership,” analyst Wilson Liew wrote.

CapitaMalls Asia, the retail property unit of Southeast Asia’s largest developer, has 49 shopping centers in China. It opened a mall in Chengdu on April 28 with 90 percent occupancy, according to an earnings presentation April 25.

The malls in China had a “committed” occupancy rate of more than 96 percent as of March 31, Seng Jin Lim, head of corporate communications and marketing at CapitaMalls Asia in Singapore, said in an e-mailed reply to questions. The company doesn’t offer incentives to retailers to open in its malls because it can leverage its network of more than 102 shopping centers and 13,000 leases in Asia, Lim said.

Under Pressure

In contrast, Haitong Securities downgraded China’s department-store industry last year. Golden Eagle (3308)was the least favored to weather a boom in mall space because it’s “very conservative” in terms of its operation, said Elyse Wang, a Shenzhen-based analyst at Haitong who covers six Chinese department stores.

About 40 percent of 32 analysts who cover the stock recommend buying Golden Eagle, the second-largest Chinese department-store operator by market value, according to data compiled by Bloomberg.

Golden Eagle operates on a turnover rent basis with luxury brands such as Gucci and does not collect basic rents, Lily Xu, a spokeswoman, said in response to questions. Turnover rents are payments based on a percentage of annual sales.

Still, Carlyle Group LP, the world’s second-biggest private-equity firm, bought a 49 percent stake in two shopping malls in Suzhou and Hangzhou in May to take advantage of rising domestic consumption.

Empty Malls

At GuocoLand Ltd.’s Guoson Center, across from Shanghai’s Changfeng Park, about 13 kilometers (8 miles) from the historic Bund, most shops are boarded up. A few stores are scattered on the first floor of the four-story mall that houses a KFC fried-chicken outlet and a BMW car dealership. The upper floors are largely vacant. The Tasty Cafe has the only rented space on the third floor. Most staff were taking a break at dinner time on a recent visit.

GuocoLand, which gets almost a third of its revenue from China, opened the mall in 2010 as part of a development that includes offices, serviced apartments and a five-star hotel in the city’s west, according to the Singapore-based developer’s website.

The mall has an occupancy rate of only 40 percent to 45 percent because it was not planned or designed properly, Benjamin Han, who took over as managing director of GuocoLand’s unit in Shanghai six months ago, said in an interview.

Bund Square

The developer has started remodeling the mall to reposition it, including removing at least 10 tenants that don’t fit in, Han, an architect, said. The company plans to have the work completed in the next 12 months, he added.

“The reason why the mall is doing so badly is that it was so badly conceived,” he said.

At Bund Square, an outdoor mall operated by Shanghai Greenland Group Co. that opened at the southwestern end of the Bund last year, about half of the stores are occupied, including a Nike outlet. Empty shops are covered with boards featuring pictures of champagne glasses and slogans promoting a luxurious lifestyle. Some fourth-floor shops are still under renovation.

Though some stores are under renovation, they have been rented out, Shanghai Greenland spokesman Wang Xiaodong said in a phone interview. He declined to give the mall’s vacancy rate.

Collecting Rent

Worsening the problem, economic growth is weakening. The International Monetary Fund in May lowered its forecasts for China’s growth this year after a slowdown in the first quarter.

Retail sales in the first five months of 2013 grew 12.6 percent, slowing from 14.5 percent a year earlier, according to the Beijing-based National Bureau of Statistics.

Retail rents in the four major cities fell 6.2 percent to 2,090 yuan ($341) per square meter a month in the first quarter from the previous one, while in second-tier cities they declined 6.3 percent to 994 yuan per square meter, according to Cushman.

Retail vacancy rates in Shanghai rose to 6 percent in the first three months this year from 5.4 percent in the previous quarter, Cushman said. They will rise as high as 9.6 percent next year, the broker estimated.

Deal Specific

Luxury brands such as Louis Vuitton or Gucci could receive about 25 million yuan ($4 million) in fees toward fitouts when they lease a 500-square-meter store, while fashion brands such as Sweden’s Hennes & Mauritz AB (HMB) and Spain’s Inditex SA (ITX)’s Zara typically get 5 million yuan to 15 million yuan in such fees, according to a Shanghai-based property adviser who has acted as a broker for retailers and asked for anonymity because he is divulging industry secrets.

Each rent deal is different. High-end brands typically pay lower turnover rents because of the prestige they bring to shopping centers, as well as obtaining free-rent periods. Brands with less of a cache pay a monthly turnover rent or a fixed rent, depending on which is higher.

Gucci and Inditex said in e-mailed statements that they don’t comment on lease contract conditions. Grace Zhao, LVMH’s Shanghai-based spokeswoman, declined to comment on commercial relations. H& M didn’t reply to an e-mailed request for comment on their leases in China.

Louis Vuitton, Gucci and Swiss luxury watchmaker Piaget are among companies reining in the pace of new store openings as China’s economic growth slows, their businesses in the country mature and more Chinese consumers had overseas to avoid higher luxury taxes at home.

Developers offering to help build storefronts or offer free rents are not uncommon in China, according to Piaget, owned by Cie. Financiere Richemont SA (CFR).

“It’s part of the marketing strategies of different malls,” Dimitri Gouten, Piaget’s Asia-Pacific president, said. These shopping centers are usually “weaker malls,” he said.

x 0

Time to vest more and good for reits now

CitizenBeng ( Date: 02-Jul-2013 17:28) Posted:

Chinese Malls Waive Rents as Vacancies Loom: Real Estate

By Bloomberg News - Jul 2, 2013

Chinese landlords are forgoing rent and paying to outfit stores for mass-market fashion brands including Zara and H& M, a bid to blunt the impact of a boom in shopping-mall construction that threatens to push up vacancies.

Preferential leasing terms were reserved until recently for luxury brands such as Louis Vuitton and Gucci, which are coveted because they bring shoppers into malls. Now moderately priced labels are being enticed with offers as landlords work harder to fill shops, according to Cushman & Wakefield Inc. and RET Property Consultancy Ltd.

Consumer demand is cooling as China’s economy slows and President Xi Jinping reins in lavish spending by officials. Big mall operators, including China Resources Land Ltd. (1109) and Hang Lung Properties Ltd. (101), can withstand the slowdown at the expense of smaller ones such as Golden Eagle Retail Group Ltd. (3308), according to Credit Suisse Group AG and Haitong International Securities Ltd. Landlords focused on lower-tier markets will be under more pressure as smaller cities add retail space at a faster rate than larger ones.

“Competition in China’s commercial property market is very fierce, especially at those new malls at non-central locations in second- and third-tier cities,” said Carrie Liu, Shanghai-based general manager for development at Shui On Development Ltd., a subsidiary of Shui On Land Ltd (272). The company, which built the city’s Xintiandi restaurant, bar and retail district, has never offered subsidies such as free rents, Liu said.

Mall Building

Chinese developers built more malls and expanded into smaller cities as consumer spending and incomes grew, elevating China’s economy to the largest in the world after the U.S.

Half of the 32 million square meters (344 million square feet) of shopping centers under construction around the world are in China, according to CBRE Group Inc. (CBG) About 21 million square meters of retail space is expected to be completed by next year, a 38 percent increase in supply, according to broker Cushman, which tracks 20 cities in China.

That’s setting up a test for developers as retailers including LVMH Moet Hennessy Louis Vuitton SA (MC) and Gucci-owner Kering SA (PP) respond to slowing growth by scaling back expansion plans in the world’s most populous country.

Second-tier cities, including Chengdu, Shenyang, Hangzhou and Qingdao, may be stuck with the highest vacancy rates in 2014, according to Cushman. The financial hub of Shanghai, the capital Beijing and the southern industrial cities of Guangzhou and Shenzhen are considered the first-tier cities.

Vacancy rates in some less affluent cities could surge to more than 30 percent by next year from as low as 6.8 percent in the first quarter this year, Cushman forecasts.

Large Developers

“The problem we see today in China is that there’s really no proper planning,” Sigrid Zialcita, Singapore-based managing director for Asia-Pacific research at Cushman, said in a phone interview. “There are really a number of cities prone to having periods of oversupply.”

Mall space in China’s four major cities will grow about 40 percent by the end of 2015, while in 16 smaller cities it will double in the period, according to Steven McCord, China retail research director at property brokerage Jones Lang LaSalle Inc. (JLL)

Developers of some new malls may struggle to reach even 70 percent occupancy, forcing delays in opening, said Michael Zhang, executive director and co-founder of Beijing-based RET Property Consultancy.

Best Positioned

In developed markets such as Hong Kong and Singapore, vacancy rates are between 6 percent and 7 percent because of a shortage of supply, according to Cushman.

“Free rent can exist in any market where the tenants have the advantage,” McCord said. “China’s characteristics are that there’s a lot of new construction and there is so much new supply.”

Hong Kong-based China Resources Land has the best mall locations and highest internal rate of return on its mature malls at about 20 percent, among five major operators from outside the mainland, including Hang Lung and CapitaMalls Asia Ltd (CMA)., according to Credit Suisse. It rates state-owned China Resources Land outperform with a 12-month price target at HK$29.80. The stock closed at HK$21.20, up 4.2 percent, in Hong Kong on June 28.

While “it may be debatable whether China’s housing market is oversupplied, there’s consensus that China’s commercial property sector is indeed,” said Jinsong Du, a Hong Kong-based property analyst at Credit Suisse. “Bigger mall developers definitely outperformed those smaller ones.”

Two calls to Annie Li, Hong Kong-based investor relations director at China Resources Land, weren’t answered.

Hang Lung

Hang Lung, based in Hong Kong, is investing more than $8.5 billion building malls in China, a bet by Chairman Ronnie Chan on an expanding middle class. Fifteen of 23 analysts recommend buying the stock, according to data compiled by Bloomberg. Elisa Fong, assistant manager of Hang Lung’s corporate communications, declined to comment.

Brokerage Maybank Kim Eng raised its earnings forecast for CapitaMalls Asia for the fiscal years 2013 to 2015 by 5 percent to 10 percent, and reiterated a buy recommendation in an April report, with a 12-month price target of S$2.57. The developer closed at S$1.795 yesterday. The Singapore-based company will continue to look for opportunities and expand in China to “leverage its market leadership,” analyst Wilson Liew wrote.

CapitaMalls Asia, the retail property unit of Southeast Asia’s largest developer, has 49 shopping centers in China. It opened a mall in Chengdu on April 28 with 90 percent occupancy, according to an earnings presentation April 25.

The malls in China had a “committed” occupancy rate of more than 96 percent as of March 31, Seng Jin Lim, head of corporate communications and marketing at CapitaMalls Asia in Singapore, said in an e-mailed reply to questions. The company doesn’t offer incentives to retailers to open in its malls because it can leverage its network of more than 102 shopping centers and 13,000 leases in Asia, Lim said.

Under Pressure

In contrast, Haitong Securities downgraded China’s department-store industry last year. Golden Eagle (3308)was the least favored to weather a boom in mall space because it’s “very conservative” in terms of its operation, said Elyse Wang, a Shenzhen-based analyst at Haitong who covers six Chinese department stores.

About 40 percent of 32 analysts who cover the stock recommend buying Golden Eagle, the second-largest Chinese department-store operator by market value, according to data compiled by Bloomberg.

Golden Eagle operates on a turnover rent basis with luxury brands such as Gucci and does not collect basic rents, Lily Xu, a spokeswoman, said in response to questions. Turnover rents are payments based on a percentage of annual sales.

Still, Carlyle Group LP, the world’s second-biggest private-equity firm, bought a 49 percent stake in two shopping malls in Suzhou and Hangzhou in May to take advantage of rising domestic consumption.

Empty Malls

At GuocoLand Ltd.’s Guoson Center, across from Shanghai’s Changfeng Park, about 13 kilometers (8 miles) from the historic Bund, most shops are boarded up. A few stores are scattered on the first floor of the four-story mall that houses a KFC fried-chicken outlet and a BMW car dealership. The upper floors are largely vacant. The Tasty Cafe has the only rented space on the third floor. Most staff were taking a break at dinner time on a recent visit.

GuocoLand, which gets almost a third of its revenue from China, opened the mall in 2010 as part of a development that includes offices, serviced apartments and a five-star hotel in the city’s west, according to the Singapore-based developer’s website.

The mall has an occupancy rate of only 40 percent to 45 percent because it was not planned or designed properly, Benjamin Han, who took over as managing director of GuocoLand’s unit in Shanghai six months ago, said in an interview.

Bund Square

The developer has started remodeling the mall to reposition it, including removing at least 10 tenants that don’t fit in, Han, an architect, said. The company plans to have the work completed in the next 12 months, he added.

“The reason why the mall is doing so badly is that it was so badly conceived,” he said.

At Bund Square, an outdoor mall operated by Shanghai Greenland Group Co. that opened at the southwestern end of the Bund last year, about half of the stores are occupied, including a Nike outlet. Empty shops are covered with boards featuring pictures of champagne glasses and slogans promoting a luxurious lifestyle. Some fourth-floor shops are still under renovation.

Though some stores are under renovation, they have been rented out, Shanghai Greenland spokesman Wang Xiaodong said in a phone interview. He declined to give the mall’s vacancy rate.

Collecting Rent

Worsening the problem, economic growth is weakening. The International Monetary Fund in May lowered its forecasts for China’s growth this year after a slowdown in the first quarter.

Retail sales in the first five months of 2013 grew 12.6 percent, slowing from 14.5 percent a year earlier, according to the Beijing-based National Bureau of Statistics.

Retail rents in the four major cities fell 6.2 percent to 2,090 yuan ($341) per square meter a month in the first quarter from the previous one, while in second-tier cities they declined 6.3 percent to 994 yuan per square meter, according to Cushman.

Retail vacancy rates in Shanghai rose to 6 percent in the first three months this year from 5.4 percent in the previous quarter, Cushman said. They will rise as high as 9.6 percent next year, the broker estimated.

Deal Specific

Luxury brands such as Louis Vuitton or Gucci could receive about 25 million yuan ($4 million) in fees toward fitouts when they lease a 500-square-meter store, while fashion brands such as Sweden’s Hennes & Mauritz AB (HMB) and Spain’s Inditex SA (ITX)’s Zara typically get 5 million yuan to 15 million yuan in such fees, according to a Shanghai-based property adviser who has acted as a broker for retailers and asked for anonymity because he is divulging industry secrets.

Each rent deal is different. High-end brands typically pay lower turnover rents because of the prestige they bring to shopping centers, as well as obtaining free-rent periods. Brands with less of a cache pay a monthly turnover rent or a fixed rent, depending on which is higher.

Gucci and Inditex said in e-mailed statements that they don’t comment on lease contract conditions. Grace Zhao, LVMH’s Shanghai-based spokeswoman, declined to comment on commercial relations. H& M didn’t reply to an e-mailed request for comment on their leases in China.

Louis Vuitton, Gucci and Swiss luxury watchmaker Piaget are among companies reining in the pace of new store openings as China’s economic growth slows, their businesses in the country mature and more Chinese consumers had overseas to avoid higher luxury taxes at home.

Developers offering to help build storefronts or offer free rents are not uncommon in China, according to Piaget, owned by Cie. Financiere Richemont SA (CFR).

“It’s part of the marketing strategies of different malls,” Dimitri Gouten, Piaget’s Asia-Pacific president, said. These shopping centers are usually “weaker malls,” he said.

x 0

Chinese Malls Waive Rents as Vacancies Loom: Real Estate

By Bloomberg News - Jul 2, 2013

Chinese landlords are forgoing rent and paying to outfit stores for mass-market fashion brands including Zara and H& M, a bid to blunt the impact of a boom in shopping-mall construction that threatens to push up vacancies.

Preferential leasing terms were reserved until recently for luxury brands such as Louis Vuitton and Gucci, which are coveted because they bring shoppers into malls. Now moderately priced labels are being enticed with offers as landlords work harder to fill shops, according to Cushman & Wakefield Inc. and RET Property Consultancy Ltd.

Consumer demand is cooling as China’s economy slows and President Xi Jinping reins in lavish spending by officials. Big mall operators, including China Resources Land Ltd. (1109) and Hang Lung Properties Ltd. (101), can withstand the slowdown at the expense of smaller ones such as Golden Eagle Retail Group Ltd. (3308), according to Credit Suisse Group AG and Haitong International Securities Ltd. Landlords focused on lower-tier markets will be under more pressure as smaller cities add retail space at a faster rate than larger ones.

“Competition in China’s commercial property market is very fierce, especially at those new malls at non-central locations in second- and third-tier cities,” said Carrie Liu, Shanghai-based general manager for development at Shui On Development Ltd., a subsidiary of Shui On Land Ltd (272). The company, which built the city’s Xintiandi restaurant, bar and retail district, has never offered subsidies such as free rents, Liu said.

Mall Building

Chinese developers built more malls and expanded into smaller cities as consumer spending and incomes grew, elevating China’s economy to the largest in the world after the U.S.

Half of the 32 million square meters (344 million square feet) of shopping centers under construction around the world are in China, according to CBRE Group Inc. (CBG) About 21 million square meters of retail space is expected to be completed by next year, a 38 percent increase in supply, according to broker Cushman, which tracks 20 cities in China.

That’s setting up a test for developers as retailers including LVMH Moet Hennessy Louis Vuitton SA (MC) and Gucci-owner Kering SA (PP) respond to slowing growth by scaling back expansion plans in the world’s most populous country.

Second-tier cities, including Chengdu, Shenyang, Hangzhou and Qingdao, may be stuck with the highest vacancy rates in 2014, according to Cushman. The financial hub of Shanghai, the capital Beijing and the southern industrial cities of Guangzhou and Shenzhen are considered the first-tier cities.

Vacancy rates in some less affluent cities could surge to more than 30 percent by next year from as low as 6.8 percent in the first quarter this year, Cushman forecasts.

Large Developers

“The problem we see today in China is that there’s really no proper planning,” Sigrid Zialcita, Singapore-based managing director for Asia-Pacific research at Cushman, said in a phone interview. “There are really a number of cities prone to having periods of oversupply.”

Mall space in China’s four major cities will grow about 40 percent by the end of 2015, while in 16 smaller cities it will double in the period, according to Steven McCord, China retail research director at property brokerage Jones Lang LaSalle Inc. (JLL)

Developers of some new malls may struggle to reach even 70 percent occupancy, forcing delays in opening, said Michael Zhang, executive director and co-founder of Beijing-based RET Property Consultancy.

Best Positioned

In developed markets such as Hong Kong and Singapore, vacancy rates are between 6 percent and 7 percent because of a shortage of supply, according to Cushman.

“Free rent can exist in any market where the tenants have the advantage,” McCord said. “China’s characteristics are that there’s a lot of new construction and there is so much new supply.”

Hong Kong-based China Resources Land has the best mall locations and highest internal rate of return on its mature malls at about 20 percent, among five major operators from outside the mainland, including Hang Lung and CapitaMalls Asia Ltd (CMA)., according to Credit Suisse. It rates state-owned China Resources Land outperform with a 12-month price target at HK$29.80. The stock closed at HK$21.20, up 4.2 percent, in Hong Kong on June 28.

While “it may be debatable whether China’s housing market is oversupplied, there’s consensus that China’s commercial property sector is indeed,” said Jinsong Du, a Hong Kong-based property analyst at Credit Suisse. “Bigger mall developers definitely outperformed those smaller ones.”

Two calls to Annie Li, Hong Kong-based investor relations director at China Resources Land, weren’t answered.

Hang Lung

Hang Lung, based in Hong Kong, is investing more than $8.5 billion building malls in China, a bet by Chairman Ronnie Chan on an expanding middle class. Fifteen of 23 analysts recommend buying the stock, according to data compiled by Bloomberg. Elisa Fong, assistant manager of Hang Lung’s corporate communications, declined to comment.

Brokerage Maybank Kim Eng raised its earnings forecast for CapitaMalls Asia for the fiscal years 2013 to 2015 by 5 percent to 10 percent, and reiterated a buy recommendation in an April report, with a 12-month price target of S$2.57. The developer closed at S$1.795 yesterday. The Singapore-based company will continue to look for opportunities and expand in China to “leverage its market leadership,” analyst Wilson Liew wrote.

CapitaMalls Asia, the retail property unit of Southeast Asia’s largest developer, has 49 shopping centers in China. It opened a mall in Chengdu on April 28 with 90 percent occupancy, according to an earnings presentation April 25.

The malls in China had a “committed” occupancy rate of more than 96 percent as of March 31, Seng Jin Lim, head of corporate communications and marketing at CapitaMalls Asia in Singapore, said in an e-mailed reply to questions. The company doesn’t offer incentives to retailers to open in its malls because it can leverage its network of more than 102 shopping centers and 13,000 leases in Asia, Lim said.

Under Pressure

In contrast, Haitong Securities downgraded China’s department-store industry last year. Golden Eagle (3308)was the least favored to weather a boom in mall space because it’s “very conservative” in terms of its operation, said Elyse Wang, a Shenzhen-based analyst at Haitong who covers six Chinese department stores.

About 40 percent of 32 analysts who cover the stock recommend buying Golden Eagle, the second-largest Chinese department-store operator by market value, according to data compiled by Bloomberg.

Golden Eagle operates on a turnover rent basis with luxury brands such as Gucci and does not collect basic rents, Lily Xu, a spokeswoman, said in response to questions. Turnover rents are payments based on a percentage of annual sales.

Still, Carlyle Group LP, the world’s second-biggest private-equity firm, bought a 49 percent stake in two shopping malls in Suzhou and Hangzhou in May to take advantage of rising domestic consumption.

Empty Malls

At GuocoLand Ltd.’s Guoson Center, across from Shanghai’s Changfeng Park, about 13 kilometers (8 miles) from the historic Bund, most shops are boarded up. A few stores are scattered on the first floor of the four-story mall that houses a KFC fried-chicken outlet and a BMW car dealership. The upper floors are largely vacant. The Tasty Cafe has the only rented space on the third floor. Most staff were taking a break at dinner time on a recent visit.

GuocoLand, which gets almost a third of its revenue from China, opened the mall in 2010 as part of a development that includes offices, serviced apartments and a five-star hotel in the city’s west, according to the Singapore-based developer’s website.

The mall has an occupancy rate of only 40 percent to 45 percent because it was not planned or designed properly, Benjamin Han, who took over as managing director of GuocoLand’s unit in Shanghai six months ago, said in an interview.

Bund Square

The developer has started remodeling the mall to reposition it, including removing at least 10 tenants that don’t fit in, Han, an architect, said. The company plans to have the work completed in the next 12 months, he added.

“The reason why the mall is doing so badly is that it was so badly conceived,” he said.

At Bund Square, an outdoor mall operated by Shanghai Greenland Group Co. that opened at the southwestern end of the Bund last year, about half of the stores are occupied, including a Nike outlet. Empty shops are covered with boards featuring pictures of champagne glasses and slogans promoting a luxurious lifestyle. Some fourth-floor shops are still under renovation.

Though some stores are under renovation, they have been rented out, Shanghai Greenland spokesman Wang Xiaodong said in a phone interview. He declined to give the mall’s vacancy rate.

Collecting Rent

Worsening the problem, economic growth is weakening. The International Monetary Fund in May lowered its forecasts for China’s growth this year after a slowdown in the first quarter.

Retail sales in the first five months of 2013 grew 12.6 percent, slowing from 14.5 percent a year earlier, according to the Beijing-based National Bureau of Statistics.

Retail rents in the four major cities fell 6.2 percent to 2,090 yuan ($341) per square meter a month in the first quarter from the previous one, while in second-tier cities they declined 6.3 percent to 994 yuan per square meter, according to Cushman.

Retail vacancy rates in Shanghai rose to 6 percent in the first three months this year from 5.4 percent in the previous quarter, Cushman said. They will rise as high as 9.6 percent next year, the broker estimated.

Deal Specific

Luxury brands such as Louis Vuitton or Gucci could receive about 25 million yuan ($4 million) in fees toward fitouts when they lease a 500-square-meter store, while fashion brands such as Sweden’s Hennes & Mauritz AB (HMB) and Spain’s Inditex SA (ITX)’s Zara typically get 5 million yuan to 15 million yuan in such fees, according to a Shanghai-based property adviser who has acted as a broker for retailers and asked for anonymity because he is divulging industry secrets.

Each rent deal is different. High-end brands typically pay lower turnover rents because of the prestige they bring to shopping centers, as well as obtaining free-rent periods. Brands with less of a cache pay a monthly turnover rent or a fixed rent, depending on which is higher.

Gucci and Inditex said in e-mailed statements that they don’t comment on lease contract conditions. Grace Zhao, LVMH’s Shanghai-based spokeswoman, declined to comment on commercial relations. H& M didn’t reply to an e-mailed request for comment on their leases in China.

Louis Vuitton, Gucci and Swiss luxury watchmaker Piaget are among companies reining in the pace of new store openings as China’s economic growth slows, their businesses in the country mature and more Chinese consumers had overseas to avoid higher luxury taxes at home.

Developers offering to help build storefronts or offer free rents are not uncommon in China, according to Piaget, owned by Cie. Financiere Richemont SA (CFR).

“It’s part of the marketing strategies of different malls,” Dimitri Gouten, Piaget’s Asia-Pacific president, said. These shopping centers are usually “weaker malls,” he said.

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Don't listen to this milen..

He is always ask people not to miss boats and to bid when prices are falling..

His posts are based on no reference! And he is doing this in other chat forums as well.

I

will advise all to do research and invest wisely.

Just ignore him and invest with care!

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hi milen,

u mean this " a non-executive director of Mapletree Group trusts made rare purchases in Mapletree Logistics Trust, Mapletree Industrial Trust, Mapletree Commercial Trust and Mapletree Greater China Commercial Trust." ?

But it does not pull up the price.

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Perennial CRT is below IPO price. Around 3rd wk July will b given 0.019 dividend.

steadylar ( Date: 25-Jun-2013 12:07) Posted:

walau, back to IPO price 93c. By the way what good news huh?

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walau, back to IPO price 93c. By the way what good news huh?

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Collect more shares now at lower prices....good news on the way

huat ar

cdodkny ( Date: 21-Jun-2013 11:47) Posted:

BB push downwards.