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Having achieved annualised revenue of RMB500m during the 2nd half of 2011 (RMB256m for the half year), TCT is looking
forward positively to its top line revenue prospects for 2012 and estimates growth of more than 5%, having regard for the
limited lease expires due in 2012.
REFURBISHMENT
With the successful completion of the refurbishment of Central Plaza in 2010 evidenced by its achievement of 100%
occupancy during 2011, TCT now turns its attention to its 2011 acquisition of Huai Hai Mall.
This property, strategically located in the heart of Shanghai’s luxury goods precinct is to complete its redevelopment in
2014 as a high-end luxury goods retail outlet. During 2011 and expected in 2012 is largely a “holding program” exercise to
see the property through its lease expiry program into 2013.
Initial work is being done in respect of design and preliminary discussions and negotiations ongoing with local government
authorities ahead of a formal development approval process to get underway in late 2012.
Huai Hai Mall remains one of the most exciting assets in TCT’s portfolio and the ability to create strong rental growth (rents
currently one-third of nearby properties housing tenants such as Cartier and Tif fany’s) and additional balance sheet value
in the years ahead remains a strong focus for TCT’s management team.
LAND BANK
TCT’s foray into the 2nd tier market of Qingdao is showing early promise. Whilst the existing retail facility at Central
Avenue Mall, dominated by Lotte Department Store, is dealing with some issues regarding stability of the rent roll
(occupancy at December 2011 84.3% vs 88.8% at acquisition) this eventuality was built into TCT’s underwriting of the
acquisition which included a 5 year rental guarantee equivalent to 10% of the acquisition price.
However from a market perspective Qingdao continues to exhibit promise as a destination for quality retail. Retail rents
during the year grew 6.3% according to Jones Lang LaSalle and this was supported by continued growth in disposable
income of 14.3% Domestic and international visitor numbers also continued their growth trend of the past 10 years
delivering increased visitation of 12.6% over 2010.
TCT continues to build its management team in Qingdao appointing a permanent head of that business in late 2011 in
the form of Yuning Wei, an experienced professional having spent the last 4 years in Qingdao with the GIC Group of
Singapore and most recently one of China’s largest and most respected developers Wanke as its head of development in
Qingdao.
Yuning’s appointment supported by a number of staf f on the asset management front will be complemented by further
additions across 2012 as TCT builds towards construction commencement. International design firm Broadway Malyan
has been appointed as coordinating architect and discussions are well advanced with local authorities regarding design
and development approvals.
Subject to sourcing construction financing during 2012 it is expected that the next phase of development will commence
prior to year end.
Source: Jones Lang LaSalle
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