CapitaLand China Trust 1Q 2026: Same-Store NPI +1.3% YoY Despite -3.5% Headline; Logistics Reversion Swings -24.5% to -1.4%; Cost of Debt at 3.10% Cycle Low; Retail Traffic, Sales, Occupancy Cost All Improving

CapitaLand China Trust 1Q 2026 (quarter ended 31 March 2026) delivered gross revenue of RMB 416.4 million (-5.3% YoY headline) and net property income of RMB 282.4 million (-3.5% YoY headline) — but the headline numbers are the smaller story. The larger story is that same-store NPI, stripping out the divested CapitaMall Yuhuating, grew +1.3% YoY, and three operational dynamics underneath that number point to a portfolio stabilising rather than deteriorating. Logistics reversion swung from -24.5% in FY 2025 to -1.4% in 1Q 2026. Retail shopper traffic, tenant sales and occupancy cost all moved in the right direction. Cost of debt dropped to 3.10%, the lowest in CLCT's recent disclosure cycle. Six insights beyond the headline.

Gross Revenue RMB 416.4M (1Q 2025: RMB 439.7M; -5.3% headline; -0.4% same-store). NPI RMB 282.4M (1Q 2025: RMB 292.5M; -3.5% headline; +1.3% same-store). Retail revenue RMB 299.0M (-7.2% headline; -0.5% same-store). Business Park/Logistics revenue flat YoY. Same-store cost reduction of 3.7%. Total debt S$1,730.4M (1Q 2025: S$1,867.2M). Aggregate leverage 41.4% (Dec 2025: 40.7%; 1Q 2025: 42.6%; -120bps YoY). Average cost of debt 3.10% (1Q 2025: 3.51%; -41bps YoY). ICR 2.9x. WAM 3.2 years. RMB-denominated debt 59% (78% with FX hedges). Total Assets S$4.5B including 5% stake in CapitaLand Commercial C-REIT. Market Cap S$1.1B at S$0.640 unit price. Distribution yield 7.5% on FY 2025 DPU of 4.82 S cents. Portfolio: 17 properties across 11 cities — 8 retail malls (70.2% of GRI), 5 business parks (26.5%), 4 logistics parks (3.3%). Retail committed occupancy 97.0%, Business Park 86.0%, Logistics Park 99.0%.

The single most striking operational data point is the logistics rental reversion trajectory. FY 2025 printed -24.5%, reflecting real market pressure on Chinese logistics rents across Tier 1 and Tier 2 cities. The 1Q 2026 print came in at -1.4% — a 2,310 basis point improvement in one quarter, broad-based across 17.4 thousand square metres of executed leasing rather than a mix-shift artefact. Committed occupancy climbed to 99.0% from 95.7% a year earlier, with Chengdu Shuangliu accelerating from 82.9% to 96.2% — a 1,330 basis point gain on the previously weakest asset. Shanghai Fengxian, Kunshan Bacheng and Wuhan Yangluo are all fully occupied. The segment is not yet at rental growth, but the end of rental decline is a meaningful marker. For a portfolio absorbing the tail of a three-year logistics downcycle, the 24.5% to 1.4% swing is the cleanest operational signal in the deck.

The headline NPI decline of -3.5% would, read alone, suggest portfolio earnings erosion. The mechanics of the comparison say otherwise. CapitaMall Yuhuating was divested during 2025 as part of the strategic capital recycling framework. The 1Q 2025 base included Yuhuating's contribution; the 1Q 2026 period does not. Stripping that single-asset contribution produces a like-for-like read, and on that basis net property income grew +1.3% YoY despite the RMB-reporting headwind. Retail same-store revenue was only -0.5%, with CapitaMall Wangjing and CapitaMall Xuefu post-AEI contributions partially offsetting softer rents at Xinnan, Grand Canyon and Aidemengdun. Business Park and Logistics revenue was flat same-store. Same-store cost reduction of 3.7% amplified the bottom-line effect. Flat-to-positive same-store performance in a portfolio undergoing active asset recycling is a materially different read from a headline that looks like business deterioration.

Every primary retail operating indicator moved in the right direction. Shopper traffic +3.3% YoY. Tenant sales +5.5% YoY headline, +9.9% excluding automobile sales. Occupancy cost dropped to 17.0% — the lowest in the portfolio's five-year disclosure window, from 27.5% in 2022 and 17.5% at FY 2025. Three new supermarkets delivered RMB 80 million in 1Q 2026 tenant sales, with traffic uplift measurable asset-by-asset: CapitaMall Xuefu +13.7%, Xizhimen +6.9%, Wangjing +4.1%. Four trade sectors showed standout sales growth — Toys & Hobbies +59.6% on the collectible toy boom, IT & Telecommunications +8.5% on China's consumption vouchers programme, Jewellery & Watches +8.0%, Food & Beverage +4.2%. The -2.1% retail reversion is -1.6% excluding two planned anchor adjustments, suggesting underlying continuing-lease reversion is tighter than the headline. Five of eight retail assets held or improved committed occupancy between December 2025 and March 2026.

The FY 2025 Annual Report laid out four strategic pillars — Create Value, Unlock Value, Extract Value, Proactive Capital Management — each with specific 2026 targets. The 1Q 2026 print shows capital management running ahead of plan. The December 2025 target for RMB-denominated debt share was 50%; it stood at 59% in 1Q 2026, rising to 78% with FX forward contracts for net investment hedge. Average cost of debt declined 41 basis points YoY to 3.10% — the lowest print in CLCT's recent disclosure cycle. Aggregate leverage eased 120 basis points YoY to 41.4%. The debt stack is diversified across eight instrument types including SGD Loans Fixed, Offshore RMB Loans, SGD Loans with CCIRS, Onshore RMB Loans, Offshore RMB Bonds, FTZ Bond, SGD Bonds under MTN Programme, and SGD Loans Floating. A 50 basis point cut to RMB rates would lift distribution by S$2.6M or 0.15 cents per unit, a DPU lift of 3.0%, while a 50 basis point rise in SGD rates would reduce distribution by only 0.02 cents or -0.5%. The asymmetry is favourable given the China rate outlook relative to Singapore.

The business park segment is where the 1Q 2026 print reads genuinely negative rather than stabilising. Rental reversion of -11.3% is a real decline, not a same-store artefact. Xi'an Ascendas Innovation Towers slipped from 85.2% committed occupancy at December 2025 to 82.2% at March 2026 — a 300 basis point QoQ decline despite stated tenant-retention focus. Singapore-Hangzhou Science & Technology Park Phase I & II combined occupancy remains sub-72%. The mitigating context is relative: CLCT's Ascendas Xinsu Portfolio at 95.9% runs 2,200 basis points above the Suzhou submarket at 73.9%. AIT + AIH combined at 84.5% is 420 basis points above Xi'an at 80.3%. Hangzhou SHSTP combined at 71.8% is 1,700 basis points above Hangzhou at 54.8%. Absolute performance is weak; relative performance is strong. The 86.0% combined business park occupancy does not deteriorate the overall thesis, but it is the clearest drag on the 1Q 2026 print.

Top ten tenant contribution declined from 8.5% at March 2025 to 8.3% at March 2026 — narrowing concentration risk without any single-tenant loss. Within retail trade sector mix, three categories showed meaningful GRI share gains YoY. Food & Beverage rose from 38.8% to 39.3%. IT & Telecommunications grew from 3.7% to 4.8%, primarily driven by the AEIs at CapitaMall Xuefu and CapitaMall Wangjing. Sporting Goods & Apparel climbed from 3.1% to 4.1% with new signings of Decathlon, The North Face and ANTA Guanjun. New-to-market brand debuts at Rock Square in 1Q 2026 — Heytea Bake Lab with +84% GTO uplift versus six-month trailing average, the first Haizhu store of heritage jewellery brand, and the first Haizhu store of high-end Chinese beauty brand MAOGEPING — validate the repositioning thesis. JD.com Group remains the largest tenant at 1.6% of total rental income, POP MART at 0.8%, Yum China at 0.7%. The retail tenant mix is being actively curated toward consumption-vouchers-eligible categories and experiential formats aligned with the 15th Five-Year Plan's domestic demand expansion agenda.

At S$0.640 per unit as at 31 March 2026, CLCT trades at a distribution yield of 7.5% based on FY 2025 DPU of 4.82 S cents. Total assets of S$4.5 billion include the 5% stake in CapitaLand Commercial C-REIT, which closed at RMB 6.525 on 31 December 2025, a 14% uplift from IPO price of RMB 5.718, providing mark-to-market optionality independent of the underlying portfolio. Sponsor CapitaLand holds 25% of CLCT units. Portfolio valuation on 100% basis totals RMB 23.0 billion across retail (RMB 16.2B), business parks (RMB 5.4B) and logistics (RMB 1.4B). The debt refinancing profile is front-loaded: only 6.6% matures in 2026. The RMB debt mix creates natural revenue-denomination alignment — 70.2% of GRI is RMB-denominated retail, matched by 59% RMB debt share.

The 1Q 2026 operational print is the first quarter in CLCT's recent disclosure cycle where the dominant signal is stabilisation rather than deterioration. The -24.5% to -1.4% swing in logistics reversion is the clearest bottoming marker. Same-store NPI growth of +1.3%, retail traffic and sales turning positive across every primary indicator, and the 41bps YoY compression in cost of debt all point to a portfolio whose operational trajectory has inflected. Business parks remain the caution flag with -11.3% reversion and Xi'an AIT softening QoQ, but the segment is absorbing genuine market oversupply rather than asset-specific underperformance and is outpacing comparable submarkets by wide margins. The 2026 strategy laid out in the FY 2025 Annual Report is running ahead of schedule on the capital management pillar. At 7.5% distribution yield, CLCT offers rare listed exposure to China domestic consumption at a point where the operational trajectory is no longer an obstacle to the thesis.