Dasin Retail Trust has reported a decline in the fair value of its investment properties. After obtaining independent valuations as at June 30, 2023, the trust’s properties are now valued at RMB9.09 billion, 4.6% lower than the RMB9.53 billion as at Dec 31, 2022.
In Singapore dollars (SGD), the trust’s portfolio fell by 8.27% h-o-h to $1.7 billion from $1.85 billion previously. The larger decline was attributable to the weaker RMB against the SGD.
The main reason for the decline is due to general weaker economic and market environment, lower passing rent, negative reversion in rental rate and lower occupancy rate, says the trust.
As at June 30, 2023, Dasin Retail Trust CEDU ’s occupancy rate fell to 84.5% from 91.5% previously as at Dec 31, 2022.
Due to the decrease in valuation and the weakening of the RMB against the SGD, United States dollar (USD) and Hong Kong dollar (HKD) in which the trust’s offshore loans are denominated, the trust has reported a breach of the gearing ratio, interest coverage ratio and loan to valuation ratio which it is obliged to maintain under its offshore facilities.
Dasin Retail Trust’s trustee-manager says it is seeking a waiver from the lenders of any breach of the financial covenants. It is also seeking approval from the lenders to reset the covenants as part of the discussions with the lenders to restructure and reschedule the group’s debt obligations.
See also: Changes in ICR, leverage to come into effect immediately, with additional disclosures in March
Units in Dasin Retail Trust closed flat at 5 cents on Feb 2.
