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Investment Strategy

Objective and Investment Policy
CPNREIT will focus on its investments in immovable properties, leasehold rights in immovable properties, and sub-leasehold rights in high-end immovable properties, particularly shopping malls. CPNREIT will also invest in other types of immovable properties that are related to or complement immovable properties in the category of shopping malls, such as assets for commercial purposes, office buildings, hotels, and serviced apartments, etc., as core assets of CPNREIT.
CPNREIT will do so by means of purchasing and/or leasing and/or sub-leasing and/or accepting transfer of leasehold rights and/or sub-leasehold rights in the core assets, and place emphasis on the generation of benefits in the form of rental income and service fees, or any other income of a similar nature.
In addition, CPNREIT shall cause improvement, change, enhancement, development, and/ or disposal of assets for the purposes of generating income and returns to CPNREIT in the continuous interests of the unitholders in the long-term. Furthermore, CPNREIT also intends to make additional investments in additional assets in order to achieve the continuous growth of its income and so as to diversify risks through investment in immovable properties in different locations, as well as to invest in other assets and/or securities and/or to seek other benefits from any other methods in accordance with the Securities Laws and/or any other relevant laws.

Growth Strategies
1. Organic Growth
The REIT Manager works closely with the Property Manager to deliver stable organic growth through:
  • Developing strong tenant relationships to increase tenant retention rate; as a result, reduce vacancy levels and minimize interruption in rental income and costs associated to leasing space to new tenants
  • Optimizing rental structure by balancing combination of fixed rent with embedded step-up growth and turnover rent with minimum guarantee to capture upside potential with sales of tenants and protect downside risk
2. Asset Enhancement Initiatives (AEIs)
Active asset management can increase property income and value through:
  • Improving tenant mix and zoning to provide exceptional retail experience
  • Diversifying tenant base to balance exposure to volatile trade sectors and to prevent excessive competition among tenants in the same trade sector
  • Optimizing leasable area and maximizing the use of common area
  • Improving accessibility to increase shopper traffic
  • Upgrading amenities
3. Acquisition Growth
The REIT Manager works closely with Property Manager to pursue acquisition opportunities in new properties that will increase return on investment and net asset value of CPNREIT.
The REIT Manager keeps monitoring and considering investment opportunities in new properties based on return on investment, occupancy rates, quality of tenants, locations, potential for value creation, and conditions of land, buildings, engineering, utility, and environmental protection systems.
CPNREIT generally has long term investment horizon. However, the REIT Manager may consider disposing any property with limited scope for revenue generation and growth, and using the proceeds to invest in new properties with better growth potential.
4. Prudent Capital Management
The REIT Manager will seek to optimize CPNREIT’s capital structure and cost of capital within the borrowing limits set out and intends to employ a combination of debt and equity in financing acquisitions and asset enhancement initiatives by pursuing the following strategies:
  • Liquidity management strategy
  • Optimal capital structure strategy;
  • Debt diversification strategy;
  • Proactive risk management strategy.