Operations Review
Yield Accretive Acquisition
On 1 July 2010, CMT acquired Clarke Quay, a popular destination among Singapore residents, expatriates and tourists, located along the Singapore River and at the fringe of the CBD. This yield accretive acquisition has enlarged and diversified CMT's network of retailers across the different segments of the retail market and strengthened CMT's portfolio of retail malls catering to the different consumer markets in Singapore. The acquisition also allowed CMT to capitalise on the growing lifestyle and entertainment demand in Singapore arising from the expected increase in tourism, the economic recovery and improvement in consumer sentiment.
Asset Enhancement initiatives (AEI)
In 2010, we continued to leverage on our experience in extracting value through asset enhancement works. Raffles City Singapore successfully completed its AEI in October, which included the reconfiguration of Basement One that now houses 57 retail units, food & beverage (F&B) kiosks and restaurants and the creation of 19 new retail units at a new Basement Two link connecting City Hall mass rapid transit (MRT) station to Esplanade MRT station. At Tampines Mall, we relocated the taxi stand to make way for a 1,800 sq ft retail unit facing the MRT station, operated by McCafe since October. The new driveway constructed provides a sheltered drop off/ pick up point for passengers and pedestrians. In November, Junction 8 saw the completion of a new two-storey annex block to accommodate two F&B concepts which are able to operate outside of the mall's normal operating hours. JCube (formely known as Jurong Entertainment Centre), which is currently undergoing AEI, is on schedule to be completed by end 2011.
Lease Renewals and New Leases
On a portfolio basis, Year 2010 renewal and new leases saw an average increase of 6.5% which translates to an annual average growth rate of 2.1% over a typical three-year lease term.
Summary of Renewals/New Leases
(from 1 January to 31 December 2010) (excluding newly created and reconfigured units)
- Includes only retail leases, excluding JCube (formerly known as Jurong Entertainment Centre) which has ceased operations for asset enhancement works and The Atrium@Orchard.
- Based on compounded annual growth rate.
- Based on IMM Building's retail leases.
- Based on Raffles City Singapore's retail leases.
- Includes Sembawang Shopping Centre, Hougang Plaza and Rivervale Mall.
Lease Expiry Profile
Our tenants typically have three-year lease terms. The portfolio lease expiry profile remained well spread out as at 31 December 2010, with 24.4% and 32.8% of the leases by gross rental income due for renewal in 2011 and 2012 respectively.
Portfolio Lease Expiry Profile
(as at 31 December 2010)
- Excludes Raffles City Hotels & Convention Centre and JCube which has ceased operations for asset enhancement works.
Portfolio Lease Expiry Profile for 2011
(as at 31 December 2010)
- As a percentage of total net lettable area for each respective mall as at 31 December 2010.
- As a percentage of total gross rental income for each respective mall for the month of December 2010.
- Includes office leases (for Raffles City Singapore, The Atrium@Orchard and IMM Building) and warehouse leases (for IMM Building only).
- Includes Hougang Plaza, Sembawang Shopping Centre and Rivervale Mall, excludes JCube which has ceased operations for asset enhancement works.
Top 10 Tenants
CMT's gross rental income is well distributed within its
portfolio of more than 2,400 leases. As at 31 December
2010, no single tenant contributed more than 3.3% of total
gross rental. Collectively, the ten largest tenants accounted
for about 24.3% of the portfolio gross rental income.
10 Largest Tenants by Total Gross Rental1
(as at 31 December 2010)
- Includes CMT's 40.00% interest in Raffles City Singapore and excludes JCube. Based on committed gross rental income for the month of December 2010 and excludes gross turnover rental.
Trade Sector Analysis
CMT's portfolio is well diversified and relies on various trade sectors for rental income. As at 31 December 2010, F&B remained the largest contributor to gross rental income at 25.4% of the total portfolio. Fashion trade remained the second largest contributor to gross rental income at 12.1% which occupied 5.8% of the NLA.
- Includes CMT's 40.00% interest in Raffles City Singapore (only retail and office leases) and excludes JCube.
- Based on committed gross rental income for the month of December 2010 and excludes gross turnover rental.
- Others include Education and Art Gallery.
Portfolio Gross Turnover
In 2010, the Gross Turnover (GTO) per square foot (psf) of CMT's retail tenants increased by 6.4%, compared to 2009. In the fourth quarter of 2010, GTO registered a year-on-year increase of 8.4%.
- Excludes JCube (formerly known as Jurong Entertainment Centre), Hougang Plaza and The Atrium@Orchard.
Retail Sales Performance by Trade
Most trade categories registered stronger sales performance with Information Technology (IT) achieving the highest growth rate of 24.0% in terms of GTO psf in 2010 as compared to 2009.
- Services include convenience store, bridal shop, optical, film processing, florist, magazine/mamak store, pet shop/grooming, travel agency, cobbler/locksmith, laundromat and clinics.
Occupancy Cost
CMT's portfolio occupancy cost continued to remain healthy at 16.4% for 2010. This shows that our tenants are doing well in general.
Shopper Traffic
Shopper traffic has increased by 3.8% year-on-year from 225.6 million to 234.2 million, reflecting the improved economy as well as a result of AEI and active management of the tenancy mix in each property to ensure the shopping experience of our shoppers.
- For comparable basis, the chart includes the entire CMT portfolio of malls, except JCube which ceased operations for asset enhancement works and Hougang Plaza and The Atrium@Orchard for which traffic data was not available.