Central Pinklao’s lease renewal made first priority distribution made to unitholders of THB 1.1369 per unit, up by 113% year-on-year
CPNREIT’s 2022 financial performance significantly improved from the previous year as traffic recovered from the Covid-19 period with total revenues of THB 4.887 million, +39% year-on-year, and 2022 distribution to trust unitholders at THB 1.1369 per unit, +113% year-on-year.
Mrs. Pattamika Pongsurayamas, CEO of CPN REIT Management Co., Ltd., the REIT Manager of CPN Retail Growth Leasehold REIT (CPNREIT), reported that CPNREIT’s 2022 financial results improved significantly from the previous year after two years impacted by the COVID-19 pandemic, with total revenues of THB 4,887 million, a jump of 39% year-on-year, and distribution to trust unitholders at THB 1.1369 per unit, a significant increase of 113% year-on-year. CPNREIT’s performance continued to recover in every quarter in 2022, with average occupancy of shopping malls and offices remaining high at 92.5%. Overall footfall traffic improved 40% year-on-year which led to continued improvement in rental discounts to shopping mall tenants that almost recovered to pre-Covid levels at the end of the year. The significant reduction of average rental discounting in 2022 (14% vs 37% in 2021) was the main driver for a 53% year-on-year improvement in revenues from shopping mall business. Revenues from the office business increased by 11% year-on-year from higher occupancy rates, and revenues from hotel business growing by 343% year-on-year following recovery in local and foreign tourism. The operational performance already normalised in December 2022 thanks to improved domestic spending and year-end festive campaigns at shopping malls that boosted traffic and tenants’ sales. With continued recovery in performance, CPNREIT will be able to maintain a strong financial position and stable cash flows to operate the business going forward.”
The REIT Manager’s priority for 2023 would be the lease renewal of Central Pinklao and the adjustment of payment terms of the lease renewal of Central Rama 2, which should be concluded prior to the investment in additional assets. The REIT manager is in the process of considering the structure and appropriate funding sources that would minimise fund raising for the lease renewal and therefore lead to optimal return to unitholders of CPNREIT. Transaction details should be disclosed and proposed to trust unitholders for approval in 2Q23.
Regarding investment in additional assets, the REIT Manager will proceed with the investment at the right time and valuations even if this means delaying transactions beyond 2023. The REIT manager is considering investment into shopping malls under Central Pattana pcl that have good potential and solid performance, and does not limit consideration to only Central Surat and Cenral Ubon, as approved by Extraordinary General Meeting No. 1/2019. However, investment into other asset types such as office buildings or hotels will not be within the scope of this transaction.
The REIT Manager continues to follow the investment policy of CPNREIT to create stable and continuous growth in long-term returns to unitholders with appropriate capital structure management.
Ms. Naparat Sriwanvit, Chief Financial Officer and Senior Executive Vice President, Finance, Accounting and Risk Management of Central Pattana plc, the Sponsor, major trust unitholder (30%), and Property Manager of CPNREIT, said, “CPNREIT continued to be an important part of Central Pattana. Therefore, Central Pattana continued to support CPNREIT to ensure stable appropriate long-term returns to unitholders. As the unitholder and property manager, it is in Central Pattana’s best interest to continue to improve performance of assets under CPNREIT with appropriate asset enhancement planning as well as providing appropriate investment opportunity so that CPNREIT can deliver sustainable revenue growth. Central Pattana will also work with CPNREIT to identify optimal investment structure and provide support during capital raising.”
