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Outlook
2012 is expected to witness TCT’s first “round-trip” investment with the development, leasing and sale of Beijing Logistics
Park. Whilst TCT over the past 2 years has successfully exited 3 investments, Beijing Logistics Park will represent the
first of its green field development sites reaching completion of construction with 100% lease pre-commitment and
subsequently sold.
In addition, substantial progress is expected in respect of The HQ both in terms of advancing overall construction and
increasing the level of leasing pre-commitment for the retail component with the of fice leasing program expected to
commence in early 2013.
TCT is also expected to grow its RMB funds under management as a result of the receipt of the Equity Investment
Management Licence in February of 2012. Discussions have been ongoing for some time with a number of domestic
insurance companies and private banking units with the intention of TCT launching its first domestic RMB Fund during
2012.
With respect to the Core Portfolio, demand is expected to remain strong and rental growth across the portfolio is
expected to deliver top line revenue growth of more than 5% in RMB terms. This is seen as a strong result given that only
17% of the of fice portfolio is due for renewal in 2012 and of the retail portfolio the major expiry is Parkson Department
store at The HQ in November of 2012, which will not be renewed as part of The HQ redevelopment.
However, a note of caution for 2012. Despite the government’s decision on 17 February 2012 to reduce the Reserve
Requirement Ratio (amount of funds Chinese banks are required to hold with the Central Bank) by 0.5%, following a
similar decision in November 2011 and equivalent to approximately RMB750 billion in total additional liquidity for the
market, the prospect of increased certainty from banks as to the availability of funding for the real estate sector, remains
patchy at best. Notwithstanding that, TCT’s cashf low, prudent gearing and strong banking relationships see your
company well placed to overcome this and prosper.
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3/23/2012
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