The trustee of CapitaLand Retail China Trust (CRCT) has completed the acquisition of Galleria, Chengdu, China. The acquisition will enlarge CRCT’s portfolio size by about 14% to RMB 12,547m (S$2,550.3m). Post-acquisition, CRCT’s gearing ratio is expected to increase to about 37%.

We view the mall as a potential core asset, offering a steady contribution within the portfolio. Going forward, the focus will be on improving the F&B tenant mix and reaping cost savings from the property management, which is currently outsourced to a third party. We maintain our BUY rating with a fair value of S$1.67.

Source: OCBC Research - 3 Oct 2016