The manager of Sasseur REIT has reported a distribution per unit (DPU) of 1.90 cents for the 4QFY2021 ended December, down 1.8% y-o-y from the DPU of 1.935 in the corresponding period the year before.
The lower DPU is partly due to the retention of $2.2 million of distributable income in the quarter.
For the 4QFY2021, Sasseur REIT’s distributable income rose 8.4% y-o-y to $25.3 million.
After the retention, the quarter’s distributable income stood 8.4% up y-o-y at $23.1 million.
On a like-for-like basis, with no retention of any distributable income, the REIT’s DPU for the 4QFY2021 would have been 7.4% higher y-o-y at 2.079 cents, marking a new record.
In the FY2021, the REIT reported DPU of 7.104 cents, up 8.5% y-o-y. This came on the back of a 19.3% y-o-y surge in FY2021 distributable income of $93.9 million.
Both the DPU and distributable income for the year stood at record highs. This is the REIT’s third straight year of growth, surpassing pre-Covid-19 levels.
During the year, a total of $7.7 million distributable income was retained to fund asset enhancement initiatives (AEIs) and for working capital purposes.
Without the retention, DPU for the FY2021 would have been 7.74 cents, a record high.
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“Sasseur REIT has grown from strength to strength since listing and has performed remarkably well against a challenging and uncertain economic backdrop, as well as a fairly volatile operating environment in China in the last two years of the global pandemic,” says Cecilia Tan, CEO of the manager.
Vito Xu, chairman of the manager adds, “The China outlet sector’s structural growth trend is underpinned by a rising middle class with higher disposable income, globalisation of brands and demand for affordable luxury goods. We are confident that this sector will continue to appeal to consumers over conventional retail malls due to its attractive value propositions.”
“China’s focus on attaining ‘common prosperity’ will benefit the middle-income population, which is the main customer base for our outlets. All these augur well for Sasseur REIT as a proxy to China’s strong domestic market,” he continues.
In the 4QFY2021, total Entrusted Management Agreement (EMA) rental income came in at RMB 158.4 million ($33.6 million), down 0.5% y-o-y on the back of a 6.8% y-o-y decline in variable component of RMB52.9 million.
This was mitigated by a 3.0% y-o-y growth in the REIT’s fixed component of RMB105.5 million.
Excluding straight-line adjustments, EMA rental income for the 4QFY2021 rose 4.1% y-o-y to RMB33.6 million.
Sasseur REIT’s four outlets in China saw total sales of RMB1.16 billion during the 4QFY2021, up 16.6% q-o-q, and above China’s average q-o-q growth of 15.7% in retail sales.
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The REIT manager says it continues to see robust consumption trends in the cities where its outlets are located. The higher sales were attributed to the intensive promotional efforts that were made in close collaboration with its tenants.
The strengthening of RMB coupled with an increase in valuation of the REIT’s four properties lifted net asset value (NAV) per unit by 8.2% y-o-y to 98.94 Singapore cents as at December.
As at end-December, total portfolio occupancy stood at 94.5%, up 0.9 percentage points y-o-y.
Weighted average lease expiry (WALE) for the portfolio stood at 1.3 years by gross revenue and 2.7 by net lettable area (NLA) as at end-December.
Cash and cash equivalents as at end-December stood at $152.4 million.
The REIT says it continues to have the lowest gearing level amongst the Singapore REITs (S-REITs), with gearing at 26.1% as at end-December, down 1.8 percentage points.
In its outlook statement, the REIT believes the outlet business in China “remains appealing” despite the country’s slower economic growth.
This is due to its unique positioning as a value-for-money shopping destination. The REIT’s outlets are also well-positioned and will continue to benefit from China’s dual circulation policies, which promote domestic consumption.
Further to his remarks, Xu, chairman of the manager, highlighted the team’s clinching of four accolades in 2021, which includes the highly esteemed Corporate Excellence and Resilience Award by Singapore Corporate Awards 2020/2021 (Special Edition) and the Singapore Corporate Governance Award Runner-up (REITs & Business Trusts Category) by SIAS Investors’ Choice Awards.
“I am also heartened that our team has won multiple prestigious awards and received improved rankings by reputable and credible organisations for our corporate governance and investor relations efforts. These awards attest to our robust corporate governance framework and unwavering determination and efforts in upholding best-in-class standards.”
“The year 2021 was an equally fruitful year for Sasseur group as we continue to expand our footprint and branding in China with the opening of our 14th new outlet in Suzhou in October 2021. In addition, we are delighted to be recognised through various industry awards and our ranking in the Top 500 China Service Enterprise was elevated to 283rd position in 2021 from 304th position in 2020,” he says.
Units in Sasseur REIT closed at 83 cents on Feb 17.
Photo: Albert Chua/The Edge Singapore
