In RMB terms, the REIT’s entrusted manager agreement (EMA) rental income rose by 7.7% y-o-y to RMB170.6 million ($32.7 million) though EMA rental income in Singapore dollars (SGD) fell by 2.1% y-o-y to $33.1 million as the RMB fell against the SGD.
Under EMA rental income, fixed component income was up by 3% y-o-y to RMB111.9 million while variable component rose by 17.9% y-o-y to RMB58.7 million.
Total outlet sales rose by 17.9% y-o-y to RMB1.29 billion.
Distributable income fell by 4.0% y-o-y to $23.7 million.
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As at March 31, the REIT’s portfolio occupancy rose by 1.2 percentage points y-o-y but fell by 0.6 percentage points q-o-q to 96.6%. Its weighted average lease expiry (WALE) stood at 2.1 years by net lettable area (NLA).
The REIT’s aggregate leverage stood at 25.7%, down by 1.9 percentage points q-o-q, and is the lowest among the Singapore REITs (S-REITs). Sasseur REIT’s interest coverage ratio stood at 4.1x as at March 31, compared to 4.4x the quarter before. Based on the REIT’s sensitivity analysis, every 50 basis point (bps) shift in interest rates translates to a 0.04 cent change in its DPU per annum (p.a.).
Net asset value (NAV) per unit stood stable q-o-q at 87 cents as at March 31.
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In its release, the REIT is positive about the growing outlet industry in China with macro trends supporting the industry’s long-term growth within the country. Despite the pandemic restrictions, the REIT pointed out that there were 26 new outlets opened by various operators in FY2022 spanning 2.94 million sqm, which is the highest in 10 years.
After the pandemic, the REIT notes that consumers now prefer high-quality products at a lower cost which bodes well for the industry.
It adds that there is a good growth trajectory for outlets with fewer than 300 in China compared to over 5,600 shopping malls within the country.
In FY2023, the REIT says it intends to focus on managing its assets proactively which includes adjusting its trade mix to capitalise on new consumer trends. Other initiatives during the year includes maintaining its robust balance sheet and aggregate leverage level, as well as acquisitions in some of its target cities in China. It adds that it will be prioritising acquisitions for its Xi’an and Guiyang outlets, where it was granted the right of first refusal (ROFR) by its sponsor.
Sasseur REIT’s DPU will be paid out on June 27.
Units in Sasseur closed 1.5 cents lower or 2.04% down at 72 cents on May 9.
