With expected total potential returns of 8.2% based on March 20 closing price of 64.5 cents, she has kept her fair value at 65.5 cents.
CLCT is Singapore's largest China-focused REIT, holding eight shopping malls, five business park properties, and four logistics park properties across 11 Chinese cities. However, the portfolio is a mixed bag.
Since China’s emergence from the pandemic, there has been a divergence in performance between CLCT’s retail and new economy assets. "While the malls have benefited from a gradual consumption recovery, as well as active asset enhancement initiatives (AEIs) and repositioning, growth momentum and business sentiment remain lacklustre for the new economy assets," says Lim.
"In the new term, we expect the retail portfolio to remain the anchor for CLCT’s performance, while downside risks in terms of occupancy and rental reversions persist for the new economy assets," she adds.
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Lim notes that China’s retail sales grew 2.8% year-on-year (YoY) in the first two months of 2026, and CBRE Research is expecting cautious consumer sentiment and ample new supply to continue placing downward pressure on overall retail rents before a potential stabilisation in 2027.
For the logistics sub-sector, rents are expected to gradually bottom out and rebound around 2028, supported by limited new supply before 2030.
For Lim, potential catalysts include positive retail sales momentum buoyed by pro-consumption policies; higher than expected rental reversions and last but not least, DPU-accretive acquisitions, AEIs, and effective capital recycling.
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On the other hand, risks include a slowdown in macroeconomic conditions which would then dampen consumer and business sentiment; significant costs incurred to backfill vacancies as well as further depreciation of the RMB versus the Singdollar.
CLCT units are up 0.79% to trade at 64 cents as at 9.31 am.
