The manager of Sasseur REIT has reported distribution per unit (DPU) of 1.831 cents for the 3QFY2021 ended September 30, 3.8% higher than DPU of 1.764 cents in the same period the year before.
The quarter’s distributable income increased 6.9% y-o-y to $23.2 mil; for the quarter, the REIT manager has elected to retain $1.0 million for asset enhancement initiatives (AEIs) and working capital requirements.
3QFY2021 EMA rental income fell 1.4% y-o-y to RMB150.4 million ($31.4 million) due to dampened consumer sentiment from the outbreak of Covid-19 cases, which originated from Nanjing in July 2021.
The REIT’s four outlets in China saw total sales decline 10.3% y-o-y during the quarter to RMB996.6 million.
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Shopper traffic in the REIT’s outlets was affected due to government regulations, including partial lockdown and travel restrictions.
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The unusually warm weather in September had also reduced shoppers’ demand for winter fashion, which affected overall sales.
Despite these factors, DPU for the 3QFY2021 was higher y-o-y on lower interest expenses, as well as tax and trust expenses. A favourable RMB to SGD exchange rate also contributed to the higher RMB.
During the 9MFY2021, the REIT saw DPU increase 12.9% y-o-y to 5.204 cents, which is the highest nine-month DPU, according to the REIT manager.
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9MFY2021 EMA rental income increased 7.8% y-o-y to RMB453.6 million, while total sales for the same period stood 21.8% y-o-y up at RMB3.02 billion.
Assuming a 100% distribution rate, Sasseur REIT’s DPU for the 3QFY2021 and 9MFY2021 would’ve been at 1.913 cents and 5.661 cents respectively.
As at end-September, the REIT has an average portfolio occupancy of 93.7%, 0.6 percentage points higher y-o-y.
Its weighted average lease expiry (WALE) stood at 2.7 years as at end-September.
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The REIT has the lowest gearing among the Singapore REITs (S-REITs) at 27.2% as at end-September.
“Our proactive asset management strategies which include revitalising tenant mix, asset upgrading and careful curation of offerings delivered an encouraging set of results this quarter. In September, we held our most anticipated mega anniversary sale event of the year, where outlets operated overnight until 6am on the first day, with hourly flash sales activities to keep shoppers excited throughout the night. This event spanning over more than two weeks contributed to approximately half of the quarter’s total sales,” says Cecilia Tan, CEO of the manager.
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“The outlet industry will continue to remain appealing as consumers are on the hunt for a good deal, especially so during economic downturn. As conventional retail sales weaken, more stockpile will flow into our outlets where customers can enjoy higher discounts, translating into greater sales volume and revenue for our outlets. It is this unique position which adds resilience to our business model, which is why Sasseur REIT continues to deliver a healthy set of results, despite the slower economic growth in China during the third quarter,” says Vito Xu, chairman of the manager.
Units in Sasseur REIT closed at 86 cents on Nov 11.
Photo: Albert Chua/The Edge Singapore
