CMC REIT Delivers Stable Revenue for 2025
Successful Acquisition of Hong Kong Student Accommodation; Optimization of Financing Structure Yields Results
HONG KONG, March 17, 2026 /PRNewswire/ -- China Merchants Commercial Real Estate Investment Trust ("CMC REIT" or "the Trust", HKEX stock code: 1503) announced its annual results for the year ended 31 December 2025. The total revenue for the year amounted to RMB432 million.
In 2025, the distributable income of CMC REIT was RMB96.3 million (2024: RMB116.7 million). Based on the distributable income, the final distribution per unit for 2025 is HK$0.0410. Together with the interim distribution of HK$0.0558 per unit already paid, the total distribution per unit to Unitholders for the year amounted to HK$0.0968 (equivalent to RMB0.0854).
Steady Gearing Ratio and Expansion into Diversified Asset Portfolio
During the year, the total bank borrowings of CMC REIT amounted to RMB4.11 billion, and the gearing ratio remained steady at 42.3%. This ratio is well below the 50% limit permitted under the REIT Code. Furthermore, the Manager proactively implemented cost reduction and efficiency enhancement measures, resulting in significant decreases of 13.8% and 11.3% in property operating expenses and finance costs, respectively. As of 31 December 2025, the ratio of total liabilities (excluding net assets attributable to Unitholders) to total assets of CMC REIT was 55.9% (2024: 54.8%). Net assets attributable to Unitholders amounted to RMB2,899 million (2024: RMB3,096 million), or RMB2.57 per unit, equivalent to HK$2.85 per unit based on the central parity rate announced by the People's Bank of China on 31 December 2025. The closing unit price of HK$1.24 on 31 December 2025 represented a 56.4% discount to the NAV per Unit.
In January 2025, CMC REIT (through its wholly-owned subsidiary) entered into a 5-year facility agreement with an independent third-party bank (as lender) for a loan facility of up to RMB4.1 billion at a fixed annual interest rate of 2.80%. An amount of RMB4.008 billion from this new loan facility was drawn down in January 2025 and used to fully prepay all former offshore facilities. Drawing down a loan facility with a lower fixed interest rate to prepay loans with higher fixed interest rates has resulted in substantial savings on interest expenses for CMC REIT.
In December 2025, CMC REIT, through its wholly-owned subsidiary, signed an agreement to acquire its first student accommodation project in Hong Kong. The property has a gross floor area of approximately 23,600 sq. ft. and enjoys a prime location adjacent to The Hong Kong Polytechnic University. The property was valued at HK$213 million in November of the same year. The acquisition consideration represents a 3.3% discount, with the purchase price (before current asset adjustments) at approximately HK$206 million. Following the completion of the acquisition, the Trust plans to renovate the property into a modern student accommodation with approximately 85 beds, while the lower floors will be transformed into communal living spaces, such as a lounge and fitness center. This strategic move will further optimize the Trust's asset portfolio and deliver long-term, sustainable value and returns to Unitholders.
Core Property Portfolio Remains Relatively Stable; Retail Property Bucks the Trend with Growth
During the reporting year, the average occupancy rate of our office building portfolio experienced a decline, dropping by 12.8 percentage points from 89.8% at the end of 2024 to 77.0% at the end of 2025. Grade A office buildings performed steadily compared to the interim period. New Times Plaza successfully secured leases with several high-quality tenants at year-end, driving its occupancy rate up by 9.7 percentage points to 66.1% compared to the interim period. However, the three properties in Shekou Net Valley (Technology Building, Technology Building 2, and Cyberport Building) saw a decline in occupancy rates, primarily due to the downward adjustment of Grade A office rentals intensifying market competition, coupled with the expiration of leases from certain anchor tenants at the end of the year.
Our retail property, Garden City Shopping Centre, maintained robust operational performance during the period. Amidst generally stable passing rents, its occupancy rate continued to climb, reaching 96.5%. Looking ahead, driven by sustained growth in foot traffic, a gradual recovery in consumer spending, and the influx of visitors from Metro Line 12, the operational performance and market competitiveness of Garden City Shopping Centre are expected to remain solid and positive. In 2025, along with the further improvement in its occupancy rate, the valuation of Garden City Shopping Centre increased by RMB31 million year-on-year, rising from RMB1,486 million to RMB1,517 million.
Outlook: Resolutely Advancing Strategic Transformation and Seeking More High-Quality Investment Opportunities
In 2026, the global and domestic economic environments will continue to face multiple challenges, with prominent overall operational pressures. Externally, persistent global geopolitical conflicts will disrupt the stability of global supply chains, indirectly impacting corporate operations and consumer sentiment. Domestically, the economy is still in a phase of mild recovery, consumer sentiment has yet to fully rebound, the downturn in the real estate sector is unlikely to fundamentally reverse in the short term, and the supply-demand imbalance in the commercial real estate market is becoming increasingly apparent. Grade A office buildings in Shenzhen and Beijing are expected to see a massive influx of new supply. Coupled with a potential further contraction in short-to-medium-term demand, the market oversupply will become more pronounced, rental levels will continue to face downward pressure, and vacancy rates may climb further. The retail property market, influenced by weak consumption recovery, will see tenants' operational pressures gradually shifting to the leasing side, keeping rental and vacancy metrics under pressure.
Mr. YU Zhiliang, Chairman and Non-executive Director of CMC REIT, stated: "Facing multiple challenges, the Manager will actively advance the strategic transformation of the Trust. On one hand, we will flexibly adjust leasing strategies, broaden business formats, and seek a diversified tenant base. On the other hand, the Manager is proactively expanding our diversified asset layout. Through the acquisition of the student accommodation project on Austin Avenue in Kowloon, Hong Kong, we are unlocking counter-cyclical asset value, diversifying revenue sources, and laying the foundation for long-term, stable returns for the Trust. The renovation of the Hong Kong student accommodation is expected to be completed in August 2026, after which we will continue to optimize its operating model. Looking ahead, the Manager will steadfastly drive this transformation. While consolidating the operational quality of our core assets, we will actively cultivate new profit growth engines and explore more high-quality, diversified asset investment opportunities across Greater China. By steadily implementing these transformation initiatives, we will further optimize CMC REIT's revenue structure to achieve long-term, sustainable growth in distribution per unit."
About China Merchants Commercial REIT
China Merchants Commercial REIT is a Hong Kong collective investment scheme constituted as a unit trust and authorised under section 104 of the SFO. China Merchants Commercial REIT was launched by a well-known state-owned enterprise: China Merchants Shekou Industrial Zone Holdings Co., Ltd. (001979.SZ). It was listed on the Main Board of the Hong Kong Stock Exchange in December 2019, marking the first successful listing of a REIT in Hong Kong since 2014. It is also the first REIT to be managed by a state-owned corporation of the People's Republic of China. China Merchants Commercial REIT is a REIT formed to primarily own and invest in high quality income-generating properties in China. China Merchants Commercial REIT is managed by the REIT Manager and currently holds seven high-quality properties, with five located in Shekou, Shenzhen, one located in Beijing, and one located in Hong Kong. The REIT Manager's key investment objectives are to provide Unitholders with stable distributions and sustainable and long-term distribution growth.
For more information about China Merchants Commercial REIT, please visit its corporate website: http://www.cmcreit.com/ .
SOURCE China Merchants Commercial Real Estate Investment Trust
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