CRCT – SGX

CRCT to acquire Xizhimen Mall in Beijing

Proposed yield-accretive acquisition enlarges CRCT’s portfolio asset size to more than S$1.1 billion and strengthens CRCT’s retail foothold in Beijing Singapore, 18 October 2007 – CapitaRetail China Trust Management Limited (“CRCTML” or the “Manager”), the manager of CapitaRetail China Trust (“CRCT”), is pleased to announce that HSBC Institutional Trust Services (Singapore) Limited (the “Trustee”), as trustee of CRCT, has today entered into a conditional sale and purchase agreement with CapitaLand Retail Trustee Pte. Ltd., as trustee of CapitaRetail China Incubator Fund (“CRCIF”), for CRCT to acquire Xizhimen Mall, with a Gross Rentable Area (“GRA”) of 73,857 Square Metres (“sq m”), at an agreed property price of S$336.0 million. This transaction would mark CRCT’s first acquisition since its listing on Singapore Exchange Securities Trading Limited on 8 December 2006.

Based on the agreed property price of S$336.0 million and an average occupancy rate of 88.7%, Xizhimen Mall is expected to achieve a net property income yield (“NPI yield”) of 5.7% in Forecast Year 2008, The committed occupancy rate, which registered 87.1% as at 11 October 2007, is expected to reach close to 100% within the next few months.

The mall is expected to attain a NPI yield of 6.4% in 2009, assuming 100% committed occupancy rate. The proposed acquisition is thus yield accretive to CRCT unitholders when compared to CRCT’s implied property yield of approximately 3.3%, based on CRCT’s closing unit price of S$2.78 as at 17 October 2007¹ .

The proposed acquisition also comprises an agreement to purchase, when completed, the planned extension of the current Basement 1 of the mall (“Phase 2”) with a GRA of approximately 11,539 sq m from the original developer of Xihuan Plaza, Beijing Finance Street Construction Development Co., Ltd., subject to certain conditions being fulfilled. The extension would increase the GRA of Xizhimen Mall by 15.6%.

Phase 2 would provide direct pedestrian connectivity to the underground Mass Rapid Transit (“MRT”) station for Line 2 and the future Line 4, and to the National Railway Beijing North station situated next to the mall. The completion of this extension is expected to increase overall shopper traffic and enhance shopper flow within the mall, hence providing further upside to the mall’s overall rentals. With the strong leasing performance at the existing Basement 1², and the favourable price to be paid for Phase 2, we are confident that the acquisition of Phase 2 would provide growth to CRCT unitholders.

Two independent property valuers, Colliers International (Hong Kong) Limited (“Colliers”) and Knight Frank Petty Limited (“Knight Frank”), were commissioned by the Manager and Trustee respectively to value Xizhimen Mall. Colliers and Knight Frank have valued the property at S$338.4 million³ (RMB1,692.0 million) and S$340.0 million3 (RMB1,700.0 million) respectively, as at 30 September 2007.

Mr Hsuan Owyang, Chairman of CRCTML, said, “The yield-accretive acquisition of the prime Xizhimen Mall will grow CRCT’s portfolio asset size from its current S$763.7 million⁴ to S$1.16 billion⁵. With the secured and proprietary pipeline of quality assets from CapitaLand-sponsored private China retail property funds, as well as from potential direct acquisitions from the market, CRCT is on track to achieve its target portfolio size of S$3.0 billion by 2009. On the back of rising consumerism and growing retail sales in the Chinese retail market, we remain committed to deliver stable and growing distributions with sustainable total returns, through leveraging on our multi-pronged strategy, to our unitholders.”

Mr Lim Beng Chee, CEO of CRCTML, said, “Sitting atop one of Beijing’s only two key transportation hubs with an average commuter flow of 300,000 on weekdays and 600,000 on weekends, Xizhimen Mall is well-positioned to capture the tremendous daily pedestrian traffic to the mall. The commuter traffic will be further strengthened with Xizhimen Mall’s Phase 2 extension plan, which would provide direct pedestrian connectivity to the MRT station and the adjacent railway station from the Basement Level. The acquisition of Xizhimen Mall will also extend CRCT’s market presence to the western part of Beijing, allowing it to benefit from the large pool of middle-class shoppers and tenancy demand in areas such as Beijing Finance Street and Zhongguancun District.

Together with Anzhen, Jiulong and Wangjing Malls in other locations in Beijing, Xizhimen Mall will position CRCT favourably to capture the city’s strong retail growth opportunity which has averaged approximately 12% annually in the last decade.”

¹ The “implied property yield” is calculated as the net property income of CRCT’s existing portfolio in Forecast Year 2008 over the value imputed to the portfolio by investors in CRCT, as reflected by the price at which CRCT Units are currently trading on Singapore Exchange Securities Trading Limited.

² Committed occupancy rate for Basement 1 is 84.5% as at 11 October 2007

³ The valuers have assumed the exchange rate of S$1 = RMB5.00

⁴ Based on CRCT’s existing portfolio of seven properties as at 30 June 2007

⁵ After taking into account the proposed acquisition

Source : SGX