OPERATIONS REVIEW CHINA 5 PROPERTIES S$5.5 million TOTAL GROSS PROFIT (FY 2023) S$228.1 million VALUATION (as at 31 December 2023) S$24.1 million TOTAL REVENUE (FY 2023) 1,066 UNITS China is one of CLAS’ key markets which contributed 2% to the total gross profit for FY 2023. The five China serviced residences are under management contracts. As long stays are the primary source of business, CLAS’ China properties have an average length of stay of over six months. Somerset Grand Central Dalian is a 195-unit property situated in the central business district of the Dalian Development Area; Somerset Heping Shenyang is a 270-unit property that lies in the heart of Shenyang’s main commercial and shopping district; Somerset Olympic Tower Property Tianjin is a 185-unit property situated in the Heping district, the city’s prime commercial, entertainment and residential area; Citadines Xinghai Suzhou is a 167-unit property in the heart of the Suzhou Industrial Park; and Citadines Zhuankou Wuhan is a 249-unit property situated in the Wuhan Economic and Technological Development Zone. Somerset Heping Shenyang KEY MARKET 2023 REVIEW China’s economy grew by 5.2% in 20231, lower than the annual growth averaged in the decade before the pandemic. The recovery post-reopening was bumpier than expected with the deepening property crisis and weak consumer and business confidence. Foreign direct investment into China in 2023 was at a 30-year low, reflecting the effect of the COVID-19 lockdown and weak economic recovery in 20232. In January 2023, the Chinese government removed the quarantine requirement for all inbound arrivals, and travellers only had to present a negative test result within 48 hours of departure1. By August, the government had removed the mandatory pre-entry COVID-19 test3. Following the end of China’s ‘zero-COVID’ policy in 2023, domestic tourism more than doubled the previous year in revenue and tourist numbers, bouncing back to over 80% of 2019 levels4. International traveller numbers lagged that of domestic travellers. China recorded 35.5 million entries and exits by foreign nationals in 2023, which was close to seven times more than the number in 2022, but only 36% of the number in 20195. Reasons for the soft inbound traveller numbers included significant delays in visa applications and limited flight 1 Source: Reuters (2022 and 2024) 2 Source: The Business Times (2024) 3 Source: China Briefing (2023) 4 Source: The State Council, The People’s Republic of China (2024) 5 Source: CNN (2024) 34 CAPITALAND ASCOTT TRUST
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