THE MANAGERIn Conversation with CEO

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1. Can you bring us through CLCT’s operating performance in FY 2023?

In FY 2023, CLCT net property income (NPI) grew 5.3% to RMB1,293.7 million. This increase in NPI was boosted by stronger performance in CLCT’s retail portfolio which constitutes 75.9% of assets under management (AUM)1, and partially offset by lower contributions from the new economy portfolio. Notably, in 2H 2023, CLCT registered a year-on-year (YoY) growth of 10.5% in NPI to RMB630.0 million. This growth was primarily due to improved operating conditions and positive momentum in the retail sector driven by higher occupancies and post-asset enhancement initiatives (AEIs).

Shopper traffic2 and tenant sales2 for our retail portfolio demonstrated considerable YoY growth of 45.8% and 41.5% respectively. Occupancy for all retail properties reached 98.2%, the highest since December 20193. This recovery can be attributed to the overall improvement of China’s retail environment and to our dedicated efforts in carrying out AEIs across our assets. Through these initiatives, we have successfully introduced new trending concepts and optimised our spaces to meet the evolving demands of consumers while delivering positive rental reversions. This proactive approach not only positions us to take advantage of the consumption recovery but also ensures that we remain relevant to our catchment shoppers. During the year, our portfolio occupancy cost4 trended towards the healthy range of high teens to low 20%. As business and consumer sentiments continue to return on the back of improved sales, we will enter a more constructive lease cycle with brands seeking spaces that resonate with their strategic expansion plans. Given these developments, we are well-positioned to harness the ongoing positive momentum as we move into 2024.

Despite the weaker business sentiments, we managed to maintain our business park portfolio occupancy at 91.0%, with a positive rental reversion of 1.6% while our logistics park portfolio occupancy stood at 82.0%. Our focus for our business park assets is to actively pursue leasing opportunities in growth sectors that are in line with China's long-term growth strategy. By strategically aligning ourselves with these growth sectors, we aim to capitalise on emerging trends and secure sustainable growth for our portfolio. For our logistics assets, we remain focused on tenant retention and driving occupancy rates. We are working closely with government agencies and our established tenant community to strengthen the demand pipeline. Through careful tenant selection and the ongoing cultivation of partnerships, we will continue to navigate the current landscape and position ourselves to capture new opportunities.

2. On the sustainability front, what are some of CLCT's notable achievements during the year?

In 2023, our commitment to sustainability was recognised with major advancements in key assessments. We achieved a 5 Star rating in the GRESB Real Estate Assessment, a marked improvement from our 2 Star rating in 2022. Additionally, we maintained an A rating in the GRESB Public Disclosure, while our MSCI ESG Ratings improved from B to BBB, and our Sustainalytics ESG Risk Rating advanced from Low Risk to Negligible Risk.

In a first for CLCT’s portfolio, we completed the installation of 253 solar panels at Kunshan Bacheng Logistics Park at the end of 2023. This initiative will enable CLCT to generate renewable energy starting in 2024. These rooftop solar panels will allow us to supplement the power needs of our tenants with clean energy. Additionally, we procured offsite renewable energy for the first time with Ascendas Innovation Towers and Ascendas Innovation Hub being the first properties in the portfolio to adopt this initiative. In 2023, the renewable energy from these offsite sources comprised approximately 3.0% of our total portfolio electricity usage.

During the year, we established a Sustainability-Linked Finance Framework that comprises key performance indicators (KPIs) linked to green building certifications, renewable energy and energy consumption intensity targets. The framework is applicable to CLCT’s Sustainability-Linked Instruments, including Sustainability-Linked Bonds and Loans. To ensure transparency and credibility, we sought an independent assessment for our framework and obtained a Second Party Opinion from Moody’s Investor Service. This opinion provided an additional layer of validation and credibility to our framework, reinforcing our commitment to maintaining high standards of accountability and disclosure.

Recognising that sustainability is a continuous journey, we kept up our momentum of attaining green certifications for CLCT’s assets. In 2023, we obtained new LEED Gold certification for our retail and business park assets - CapitaMall Xizhimen, Ascendas Innovation Towers, Ascendas Innovation Hub and Singapore- Hangzhou Science & Technology Park Phase I5. Together with the certifications received for CapitaMall Wangjing and Rock Square in 2022, around 36%6 of CLCT’s portfolio is LEED Gold certified, putting us on track to achieve green certifications for all our buildings by 2030.

At the same time, we have implemented a green lease programme across all properties7 managed by CapitaLand Investment Limited (CLI), which seeks to align tenants with our sustainability goals.

3. What does CLCT expect in the road ahead?

Over the years, we have consistently positioned ourselves to be in line with China’s economic and development plans. With the Chinese government’s focus on promoting high-quality development while driving domestic consumption, we have proactively shaped our portfolio to create a diversified multi-asset portfolio that comprises retail properties, business parks and logistics parks.

In the near future, we will continue to adapt and build portfolio resilience and diversification, with a focus on enhancing existing asset quality and income streams. In December 2023, we announced the divestment of CapitaMall Shuangjing, which was completed in January 2024. We also ceased operations at CapitaMall Qibao ahead of the mall’s lease expiry in January 2024. With the exit of these two matured assets from our IPO, we have monetised 7 non-core and mature assets since 2017, including 6 out of 7 IPO assets. We will continue to work towards a well-balanced and resilient portfolio and press on with our reconstitution strategy by capitalising on new acquisitions while monetising non-core matured assets. The proceeds generated from divestments will be deployed towards strengthening our balance sheet and seizing new growth opportunities.

At the same time, we will continue proactively managing our retail assets to increase footfall by introducing innovative concepts through AEIs and space reconfigurations. To-date, our well-staggered AEIs across multiple assets have positioned us to ride the recovery of domestic consumption. We expect to realise the full benefits of our AEIs at CapitaMall Yuhuating, Rock Square and CapitaMall Grand Canyon in 2024, which will contribute to the improvement of our retail portfolio.

With an emphasis on tier 1 and 2 cities, we will focus on the five core city clusters where our Sponsor, CLI, has a strong presence. Anchored in strong fundamentals and a well-balanced, quality portfolio, we will continue to generate sustainable value for our Unitholders.

4. How will CLCT leverage synergies with its Sponsor and capture new opportunities?

We leverage our Sponsor’s strong domain knowledge and work closely with them to ensure the quality of our portfolio performance and business fundamentals. By sourcing assets from our Sponsor’s pipeline as well as third party vendors, we can capture market opportunities that best suit CLCT’s investment objectives. At the same time, we can tap on our Sponsor’s broader operational network and relationships to drive leasing management and asset performances.

In March 2023, the PRC government enlarged the country’s REIT market to include consumer-related infrastructure, thus bringing retail malls under the umbrella of C-REITs. Later in the year, regulators approved the first batch of retail C-REITs. Three of the four have completed the pricing process and are preparing for listing, while two more applications have been accepted by the stock exchanges. This development not only stimulates market vitality but offers new opportunities for us to execute our reconstitution strategy. In collaboration with our Sponsor, we are carefully evaluating the best course of action to participate in China’s developing and rapidly growing domestic capital markets.


Tan Tze Wooi
Chief Executive Officer


  1. Based on effective stake as at 31 December 2023 and post-completion of the divestment of CapitaMall Shuangjing as announced on 23 January 2024.
  2. Shopper traffic and tenant sales exclude CapitaMall Qibao as the mall has ceased operations since the end of March 2023.
  3. Excludes CapitaMall Minzhongleyuan as its operations were under review. The divestment of the mall was completed on 10 February 2021.
  4. Excludes supermarkets.
  5. Attained LEED Gold status for Block 1 to 3 of Singapore-Hangzhou Science & Technology Park Phase I – the remaining blocks are LEED Gold certified since 2014.
  6. By portfolio gross floor area excluding carpark space. Cover CLCT properties managed by CLI.
  7. Refers to green leases implemented for new and renewed leases. Cover CLCT properties managed by CLI.
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