Sasseur REIT Review @ 1 March 2022

Basic Profile & Key Statistics

Sasseur REIT (Sasseur) is a retail REIT that invests owns 4 outlet malls in China.

Performance Highlight

Despite lower sales and EMA rental income in RMB, EMA rental income in SGD, distributable income and DPU before retention increased YoY due to appreciation of RMB against SGD.   

Sales

4Q 2021has improved as compared to 3Q 2021 due to year-end seasonal promotional events and discounts on a wide range of products. However, it is lower than 4Q 2020 due to COVID-19 outbreaks across other China cities which affected shopper traffic as well as warmer winter in 4Q affected the sales of winter fashion and accessories.

Asset Enhancement Initiatives

The AEI for Chongqing Liangjiang Outlets has completed in December 2021 while AEI for Chongqing Bishan Outlets is expected to complete in 1Q 2022.

Related Parties Shareholding

• REIT sponsor's shareholding is high at 56.402%
• REIT manager's shareholding is moderate at 0.936%
• Directors of REIT manager's shareholding is high at 57.790%

Lease Profile

• Occupancy is moderate at 94.5%
• All income is received in RMB
• WALE is short at 1.3 years
• Highest lease expiry within 5 years is high at 63.6% which falls in 2022
• Weighted average land lease expiry is short at 28.82 years

Debt Profile

• Gearing ratio is low at 26.1%
• Cost of debt is high at 4.4%
• Fixed rate debt % is high at 91.6%
• All debts are secured debts
• WADM is short at 1.2 years
• Highest debt maturity within 5 years is high at 98.3% which falls in 2023
• Interest coverage ratio is high at 5.1 times

Diversification Profile

• Top geographical contribution is moderate at 53.4% 
• Top property contribution is high at 44.2% 
• Top 5 properties contribution is high at 100% 
• Top tenant contribution is low at 5.1% 
• Top 10 tenants contribution is low at 15.5%

Key Financial Metrics

• Property yield is high at 7.8%
• Management fees over distribution is low at 12.7% in which unitholders receive S$ 7.87 for every dollar paid 
• Distribution on capital is high at 5.3%
• Distribution margin is high at 64.7%

Trends

*The interest coverage ratio for period 1Q 2021 and before are estimated to reflect a closer figure in accordance with the Property Funds Appendix of the Code on Collective Investment Schemes.

• Uptrend - DPU, NAV per Unit, Interest Coverage Ratio
• Flat - Distribution on Capital, Distribution Margin
• Slight Downtrend - Property Yield

Relative Valuation

• P/NAV - Below -1SD for 1y; Above average for 3y & 5y
• Dividend Yield - Above average for 1y; Average for 3y & 5y

Author's Opinion

Favorable	Less Favorable
High REIT Sponsor's Shareholding	Low REIT Manager's Shareholding
High Directors of REIT Manager's Shareholding	All income in RMB
Low Gearing Ratio	Short WALE
High Fixed Rate Debt %	Concentrated Lease Expiry
High Interest Coverage Ratio	Short Weighted Average Land Lease Expiry
Low Top Tenant & Top 10 Tenants Contributions	High Cost of Debt
High Property Yield	0% Unsecured Debt
Competitive Management Fees	Short WADM
High Distribution on Capital	Concentrated Debt Maturity
High Distribution Margin	High Top Property & Top 5 Properties Contributions
DPU Uptrend
NAV per Unit Uptrend
Interest Coverage Ratio Uptrend

Sasseur performance has improved as compared to the previous quarter and continue to benefit from stronger RMB. Do note that Sasseur will start adopt the half-yearly reporting starting this year but maintain quarterly distribution. 

You could also refer below for more information:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

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*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.