Integrated Retail Real Estate Platform
We are able to tap on CapitaLand's unique integrated retail real estate platform, combining the best of retail real estate management and capital management capabilities.
Through this platform, we can call upon a professional and experienced team of operations, project and asset managers who work closely and seamlessly with each other to:
- Formulate medium and long-term strategies and initiatives to deliver sustainable returns
- Enhance shopping experiences to attract shoppers and increase shopper traffic
- Review space usage to optimise space productivity and income
- Manage lease renewals and new leases diligently to minimise rental voids
- Manage and monitor rental arrears to minimise bad debts
- Manage projects to ensure timely completion within budgets
- Manage and monitor property expenses to maximise net property income
- Address all key operational issues to ensure alignment with the strategies of the Manager
Active asset management is important for us to capture opportunities for intrinsic growth. CMT's intrinsic growth has been achieved through:
- Step-up rent
- Gross turnover rent, which is typically about 5.0% of CMT's gross revenue. This is a useful management tool which aligns CMT's interests with those of our tenants. Most of the leases at CMT's properties follow a rental structure which encompasses step-up rent plus a small component of gross turnover rent or a larger component of gross turnover rent only, whichever is higher
- Non-rental income from car parks, atrium space, advertisement panel space, casual leasing, vending machines and customer service counters
- Improved rental rates for lease renewals and new leases
Innovative Asset Enhancement Initiatives
Creative asset planning unlocks the potential value of CMT's malls to further propel growth by enhancing the retail environment and improving the attractiveness of our malls to shoppers and retailers. Diverse ways of increasing the yield and productivity of CMT's retail space include:
- Decantation whereby lower-yield space is converted to higher-yield space
- Reconfiguring retail units to optimise space efficiency
- Maximising the use of common areas, such as bridge space, and converting mechanical and electrical
areas into leasable space
- Upgrading amenities, enhancing the facade, adding play and rest areas, providing advice on shopfront design and creating better shopper circulation
To stay ahead of consumer trends, we constantly reinvent the retail experience with innovative shopping, dining and entertainment combinations, which help to maximise the sales of the tenants and generate growth through improved rental income. The increase in shopper traffic is generated through:
- Alignment of tenant mix with current market trends, which ensures a consistently good combination of attractive and popular retail outlets in CMT's malls
- New retail concepts which generate fresh excitement and positive sales
- Enhancing shoppers' experiences with a more pleasant, comfortable and exciting environment by improving connectivity to public amenities, upgrading restroom facilities, nursing rooms, children's playgrounds, designated water play areas with interactive features for children, alfresco dining areas and harnessing technological innovations
- Innovative marketing and promotional events to draw in the crowds as well as attractive loyalty programmes for shoppers to encourage repeat spending
- Attractive shopfronts and visual merchandising design ideas
- Building strategic partnerships to strengthen retail experiences
The ability to identify value-adding acquisitions, investments and greenfield development projects to add to the portfolio and further enhance its value is central
to CMT's long-term sustainable growth.
Our investments must satisfy the investment criteria of:
- Potential for growth in yield
- Rental sustainability
- Potential for value creation
CMT's 14.11% interest in CapitaLand Retail China Trust provides some exposure to the growth in the China retail real estate market without significantly changing the asset profile of CMT.
Intensive Capital & Risk Management
We seek to optimise returns to Unitholders while maintaining a strong capital base and credit rating to support CMT's growth.
Regular assessments of capital management policies are undertaken to ensure that they are adaptable to changes in economic conditions and the risk characteristics of CMT. We also monitor our exposures to various risk elements by closely adhering to well-established management policies and procedures.
As part of our proactive capital management, we diversify our sources of funding and will continue to review our debt profile to reduce refinancing risk.