Sasseur REIT Review @ 7 June 2022

Basic Profile & Key Statistics

• Main Sector(s): Retail
• Country(s) with Assets: China
  
• No. of Properties (exclude development/associate/fund): 4

Performance Highlight

In SGD terms, EMA rental income, distributable income and DPU have increased yoy mainly due to RMB appreciation against SGD.

Sales

The sales have declined due to buying sentiments weakened after outbreaks of COVID19 across cities in China in early March 2022. The sharp sales decline for Kunming outlet yoy is due to inter-city travel restrictions and supply-chain disruptions due to lockdowns in Shanghai & some major logistical hubs in Quanzhou & Suzhou.

Asset Enhancement Initiative

The AEI for Chongqing Bishan Outlets has completed in Feb which would enhance the shopper experience.

Related Parties Shareholding

• REIT sponsor's shareholding: Above median for more than 20%
• REIT manager's shareholding: Below median for more than 20%
• Directors of REIT manager's shareholding: Above median for more than 20%

Lease Profile

• Occupancy: ± 5% from median
• Income in SGD/Major Currencies: All income is received in RMB
• WALE: Below median for more than 20%
• Highest lease expiry within 5 years: Above median for more than 20%; Falls in 2022
• Weighted average land lease expiry: Below median for more than 20%

Debt Profile

• Gearing ratio: Below median for more than 20%
• Cost of debt: Above median for more than 20%
• Fixed rate debt %: ± 10% from median
• Unsecured debt %: 0%
• WADM: Below median for more than 20%
• Highest debt maturity within 5 years: Above median for more than 20%; Falls in 2023
• Interest coverage ratio: Above median for more than 20%

Diversification Profile

• Top geographical contribution: ± 10% from median
• Top property contribution: Above median for more than 20%
• Top 5 properties' contribution: Above median for more than 20%
• Top tenant contribution: Below median for more than 20%
• Top 10 tenants' contribution: Below median for more than 20%

Key Financial Metrics

• Property yield: Above median for more than 20%
• Management fees over distribution: Below median for more than 10%; $8.13 distribution for every dollar paid 
• Distribution on capital: Above median for more than 20%
• Distribution margin: Above median for more than 20%

Trends

*The interest coverage ratio for period 1Q 2021 and before is 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, Distribution Margin
• Slight Uptrend: Distribution on Capital
• Slight Downtrend: Property Yield

Relative Valuation

• P/NAV: Below average for 1y, 3y & 5y
• Dividend Yield: Above +1SD for 1y; Above average for 3y; Average for 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 Interest Coverage Ratio	Concentrated Lease Expiry
Low Top Tenant & Top 10 Tenants Contributions	Short Weighted Average Land Lease Expiry
High Property Yield	High Cost of Debt
Competitive Management Fees	0% Unsecured Debt
High Distribution on Capital	Short WADM
High Distribution Margin	Concentrated Debt Maturity
DPU Uptrend	High Top Property & Top 5 Properties Contributions
NAV per Unit Uptrend
Interest Coverage Ratio Uptrend
Distribution Margin Uptrend

Sasseur REIT performance has improved slightly as compared to the previous quarter. The occupancy has also shown improvement from 92.5% in 2Q 2021 to currently 95.4%. However, due to the COVID-19 outbreak, the sales are affected for the month of April and May. 

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 due to 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.