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Writer's pictureDaniel Lee
May 82 min read

Should You Invest In CapitaLand China Trust [Fundamental Analysis]

In this article, we'll be conducting a fundamental analysis of CapitaLand China Trust and its suitability to achieve the following investment objective: To deliver a stable dividend yield of 5% to 6% per year while having a high degree of capital preservation ability.


Information Is Accurate Up To May 24


Business Description

CapitaLand China Trust (previously known as CapitaLand Retail China Trust) is a diversified REIT that was listed in 2006 and owns 9 retail properties and 9 industrial properties in China.


What I Like About CLCT:

  • Long track record and strong sponsor



What I Do Not Like About CLCT:

  • Bulk of the debts are denominated in SGD which creates FX risks that may result in poorer performances in an event where SGD strengthens against RMB as 100% of CLCT operations is based in China and denominated in RMB.

  • Remaining underlying land lease is very short for the majority of their portfolio (2040s) which is a cause for concern as the scale of the impact upon expiry on the net asset value is unknown as there has been no precedence. (Figure 10)