Welcome again, everyone to our next At The Helm series!

At The Helm is a deep-dive into the intangibles of a company (aside from their reports and statistics) by talking to the key people behind the scenes.

The ones that run the day-to-day of the companies, and knows the ins and outs and this week, we want to do a quick spotlight on BHG Retail REIT.

The REIT owns a portfolio of community-centric retail malls across China, focusing on everyday consumption and neighbourhood engagement. At the helm is its CEO, Ms. Chan Iz-Lynn, a seasoned leader whose career spans aviation, hospitality and retail: Industries defined by customer experience and operational discipline.

Having lived and worked across multiple countries, she brings a global perspective to capital markets, combining strategic foresight with a deep understanding of consumer behaviour. Her leadership reflects a strong emphasis on adaptability, consumer relevance and long-term value creation, as the REIT navigates evolving retail dynamics in China.

Let’s check in to see what’s going on!

China’s shift towards consumer-led growth is supportive for community retail assets such as those in our portfolio, which are closely aligned with everyday spending.

Policy measures, including incentives and trade-in programmes for home appliances and digital products, could benefit retail activity over time.

At the same time, national initiatives such as “Healthy China 2030” are driving demand for health and wellness-related services, which we are seeing reflected in demand for tenants such as gyms, dance studios, and lifestyle concepts.

Our malls are primarily located within established residential catchments and cater to daily needs such as food & beverage and essential services. These categories tend to be more resilient, as they are anchored in recurring consumption. We also continue to support local brands and emerging concepts, which remain an important part of China’s evolving retail landscape.

A more measured retail environment has led to greater selectivity among tenants, particularly in terms of expansion plans. In response, we have taken a more proactive approach to tenant management, focusing on refreshing the tenant mix with concepts aligned with current consumer trends.

Recent additions include digital-first supermarket operators such as Hema Xiansheng (Freshippo) by Alibaba and Xiaoxiang Supermarket by Meituan, which integrate online and offline retail experiences. We have also introduced flagship concepts from brands such as MINISO at Chengdu Konggang, alongside lifestyle and experiential tenants that support footfall and engagement.

Our leasing structure, which includes a combination of base rent and gross turnover (GTO) components, allows for alignment with tenant performance while providing flexibility in a dynamic environment. Overall, the focus remains on maintaining a relevant and sustainable tenant mix that serves the needs of our surrounding communities.

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Experiential tenants continue to play an important role in driving footfall and enhancing shopper engagement. However, the Manager does not operate with a fixed target allocation for this segment.

The proportion of experiential tenants may vary depending on local market conditions, tenant demand and repositioning initiatives at individual properties. As such, we manage tenant mix on a property-by-property basis, taking into account the specific needs of each catchment area.

In terms of Gross Rental Income (GRI), experiential tenants accounted for approximately 69% in 2022 and 66% in 2025. While their share of Net Lettable Area (NLA) has moderated, they continue to contribute a significant portion of retail sales and customer traffic.

Our objective is to maintain a balanced mix of experiential, service-oriented and daily-needs retail that supports consistent footfall and long-term tenant sustainability. As consumer preferences evolve, the tenant mix will continue to be reviewed and refined to remain relevant to surrounding communities.

The operating environment for physical retail in China remains competitive, with leasing demand and tenant expansion generally more selective in recent years. As a result, revenue and occupancy levels across parts of the portfolio have moderated.

In FY2025, distribution was also affected by one-off expenses associated with the syndication loan rollover completed in March 2025. Without this, DPU would have been higher.

Looking ahead to 2026, the Manager is focused on stabilising operations, strengthening tenant retention and refreshing the tenant mix where appropriate. Repositioning initiatives at selected properties are also underway to enhance long-term competitiveness and reinforce our malls’ role as community-centric “third spaces”.

While the near-term environment may remain competitive, the Manager continues to prioritise operational resilience, financial discipline, and sustainable portfolio performance.

The performance of individual assets may vary depending on local market conditions and the stage of asset repositioning. For certain properties, including Hefei Changjiangxilu, tenancy rejuvenation and repositioning initiatives are currently underway.

These initiatives may temporarily affect occupancy levels as existing tenants are replaced with concepts that are better aligned with evolving consumer preferences, including family- and youth-oriented offerings.

The objective is to enhance the long-term competitiveness and relevance of the malls within their respective catchment areas.

The Manager continues to work closely with tenants and local stakeholders to strengthen footfall and tenant sustainability. Over time, these repositioning efforts are expected to support more stable operating performance as the refreshed tenant mix takes effect.

Property-level profit can be influenced by accounting adjustments that are not directly related to underlying rental income. These may include fair value movements, impairment adjustments or other non-cash items, which are typically adjusted in the computation of the REIT's distributable income.

As a result, profit movements at the property level may not always correspond directly with rental income trends. For example, valuation changes can have a significant impact on reported profit in a given period.

For retail REITs, investors generally look at operational metrics such as occupancy, rental reversions and tenant sales when assessing portfolio performance. These indicators provide a clearer view of underlying operations and support more informed long-term asset management decisions.

Key priorities in 2026 include stabilising occupancy, enhancing tenant retention, refining the tenant mix in line with evolving consumer preferences, and maintaining prudent cost and capital management. Repositioning initiatives at selected properties will also support the competitiveness of the assets over time.

While the operating environment remains competitive, particularly as retailers adopt a more selective approach to expansion, we continue to see opportunities in categories linked to daily consumption and experiential services.

Overall, the focus remains on disciplined asset management, community-centric positioning and sustainable performance as the REIT navigates the next phase of growth.

If you want to check out BHG Retail REIT, head on over to their website here for more information.

Regards
James Yeo