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China Merchants Commercial REIT Reports Total Revenue of RMB529 Million in 2024; Occupancy Rate at Garden City Shopping Centre in Shenzhen Surges Significantly; Overall Operational Performance Continues to Optimize
HONG KONG, March 18, 2025 /PRNewswire/ -- China Merchants Commercial Real Estate Investment Trust ("CMC REIT" or "the Trust", HKEX stock code:1503), announced its annual results for the year ended 31 December 2024. During the year, total revenue was RMB529 million, an increase of RMB40 million or 8.2% over the revenue for 2023.
The final DPU(distribution per unit) for 2024 is HK$0.0520. Together with the paid interim DPU of HK$0.0600, the total DPU for the Reporting Year amounted to HK$0.1120, equivalent to a distribution yield of 9.2%, based on the closing price of CMC REIT on 31 December 2024 (being HK$1.22).
Total net borrowings of CMC REIT were RMB4,086 million, equivalent to a gearing ratio of 40.5%. This ratio is lower than the permitted limit of 50% as stipulated by the Code on Real Estate Investment Trusts (the "REIT Code"). Total liabilities (excluding net assets attributable to unitholders) as a percentage of total assets were 54.8% (2023 year end: 53.0%). As at 31 December 2024, net assets attributable to Unitholders amounted to RMB3,096 million (31 December 2023: RMB3,392 million) or RMB2.74 per Unit, equivalent to HKD2.97 per Unit December 2023: RMB3,392 million) or RMB2.75 per Unit, equivalent to HKD2.97 per Unit based on central parity rate as announced by the People's Bank on 31 December 2024.
In January 2025, CMC REIT entered into a 5-year facility agreement with an independent third party bank (as lender) in respect of a loan facility in an amount up to RMB4.1 billion at a fixed interest rate of 2.80% per annum. An amount of RMB4,008 million was drawn down from this new loan facility in January 2025 and used to fully prepay the former offshore facilities with fixed rates of 3.55% and 2.93%. This drawdown on a loan facility with a lower interest rate to prepay loans with higher interest rates will result in substantial savings on interest expense for CMC REIT in 2025.
Business Performance
Over the Reporting Year, the average occupancy rate of the total property portfolio was 90.6%, with office buildings basically remained unchanged at 89.8%. The occupancy rates of its Grade-A office buildings differed. Among which, the occupancy rate of Onward Science & Trade Center significantly increased by 12.1 percentage points. As it strengthened the strategy of "price for volume" to face a more severe leasing market situation in the second half of the year, despite the significant increase in occupancy rate, the unit rental price fell by 13.2%. Meanwhiles, the occupancy rate of New Times Plaza decreased by 15.5 percentage points and the rental level decreased by 13.9%. In contrast, its three properties in the Net Valley achieved a steady increase in occupancy rate compared to the same period in 2023. Among which, the passing rent of Technology Building increased by 4.5%. Cyberport Building adopted the strategy of "price for volume", resulting in a slight decrease in passing rent.
In the context of vigorously attracting investment and promoting various preferential activities, the customer traffic and sales of Garden City Shopping Centre have increased significantly. Its occupancy rate significantly increased by 19.8 percentage points to 93.5%. In this regard, we have given a certain degree of rent reduction to new tenants, resulting in a decrease of 17.2% in the passing rent. In 2025, we will continue to improve the overall operation level of Garden City Shopping Centre.
Outlook
Considering the uncertain economic outlook for 2025, the government is taking active measures to rebalance economic activity. At the end of last year, the Central Economic Work Conference once again, after 14 years, set the tone of monetary policy as "moderately loose", indicating that there is a high possibility of further reductions in bank reserve requirements and interest rates in 2025. At the same time, the tone of the fiscal policy has been set to be "more active", and it has been made clear that the deficit ratio will increase in 2025. Debt pressure will be resolved by issuing ultra-long-term treasury bonds, special bonds and other instruments to support employment and consumption. The loose monetary policy and active fiscal policy are aimed at injecting new impetus into the economy, alleviating downward pressure, and laying the foundation for a stronger economy in 2025.
Mr. YU Zhiliang, Chairman and Non-executive Director of CMC REIT, said, "In 2025, REIT Manager will continue to prioritize stable operations as its primary goal and will focus on increasing revenue and reducing costs as a core task throughout the year. In the face of fierce market competition, CMC REIT will adjust rental rates in a timely manner according to market dynamics, to ensure the stability of the project's occupancy rate while exploring flexible leasing terms. In addition, we will also conduct a comprehensive assessment and review of the performance of various assets, and actively seek opportunities for capital optimization, so as to improve operational efficiency and achieve sustainable development. REIT Manager will also seek for more stable and high-quality diversified asset investments in the Greater China region to further diversify the income base of CMC REIT and achieve sustainable growth in DPU in the long run."
About China Merchants Commercial REIT
China Merchants Commercial REIT is a Hong Kong collective investment scheme constituted as a unit trust and authorised under section 104 of the SFO. China Merchants Commercial REIT was launched by a well-known state-owned enterprise: China Merchants Shekou Industrial Zone Holdings Co., Ltd. (1979.SZ). It was listed on the Main Board of the Hong Kong Stock Exchange in December 2019, marking the first successful listing of a REIT in Hong Kong since 2014. It is also the first REIT to be managed by a state-owned corporation of the People's Republic of China. China Merchants Commercial REIT is a REIT formed to primarily own and invest in high quality income-generating commercial properties in the PRC (including Hong Kong and Macao but excluding the CML Cities). Its initial focus is: (i) the Greater Bay Area (other than Foshan and Guangzhou, being two of the CML Cities), which is where the initial five Properties are situated; and (ii) Beijing and Shanghai. China Merchants Commercial REIT holds six high-quality properties, with five located in Shekou, Shenzhen, and one located in Beijing. It is managed by the REIT Manager whose key investment objectives are to provide Unitholders with stable distributions, sustainable and long-term distribution growth, and enhancement in the value of China Merchants Commercial REIT's properties.
For more information about China Merchants Commercial REIT, please visit its corporate website: http://www.cmcreit.com/.
