Sasseur Reit posts 8.7% rise in Q4 DPU to S$0.01415 on outlet sales growth

Sasseur Real Estate Investment Trust’s (Reit) distribution per unit (DPU) rose 8.7 per cent on the year to S$0.01415 for the fourth quarter ended Dec 31, 2023, from S$0.01302 previously.

This was driven by an 81.7 per cent year-on-year increase in the variable component of the rental income under the Reit’s entrusted management agreement (EMA) model, which stood at 58.7 million yuan (S$11.1 million) for the quarter, said the Reit’s manager on Wednesday (Feb 21).

The manager highlighted that the rise in the variable component of EMA rental income came on the back of an 84.6 per cent increase in the portfolio’s outlet sales.

“In Q4 2023, the Reit’s portfolio average occupancy rate across the four properties remained strong at 97.6 per cent, exceeding FY2019’s pre-Covid occupancy rate of 96 per cent,” said the manager, noting that its Chongqing Liangjiang Outlet maintained full occupancy in the quarter.

Sasseur Reit’s EMA rental income for the quarter rose 21.1 per cent on the year to 170.6 million yuan, from 140.9 million yuan in the same period the year before. This brought distributable income up 3.6 per cent to S$20.6 million, from S$19.9 million previously.

The distribution will be paid on Mar 28, after the record date on Mar 19.

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For the full year, DPU was 4.6 per cent lower year on year at S$0.06249, mainly led by a 7 per cent depreciation of the renminbi to the Singapore dollar, as well as increases in finance costs and tax expenses. Distributable income fell 5.8 per cent to S$83.4 million on the year.

The manager noted that excluding the impact of foreign currency translation, FY2023 DPU would have been higher by 4.1 per cent year on year at S$0.06822.

The aggregate sales of the Reit’s four outlets in FY2023 increased 31.9 per cent year on year, leading full-year EMA rental income to rise 10.7 per cent to 658.5 million yuan.

Cecilia Tan, chief executive of the manager, highlighted the resilience of the Reit’s outlet business with strong sales numbers amid economic uncertainties in China.

“The valuation of the Reit’s portfolio has stayed relatively unchanged as at end-2023 from a year ago, reflecting the strong underlying fundamentals of the outlets,” she said. The total valuation of the four China outlets owned by the Reit stood at about 8.5 billion yuan as at end-December.

As at Dec 31, 2023, Sasseur Reit’s aggregate leverage stood at 25.3 per cent, and its interest coverage ratio remained at 4.3 times. About 87 per cent of its total borrowings are hedged to fixed interest rates or pegged to stable/fixed interest rates, with a weighted average debt to maturity of 2.9 years.

The manager also noted that the lower five-year loan prime rate in China helped to cushion the Reit’s debt cost, with about 53 per cent of its total loans denominated in renminbi.

Units of Sasseur Reit : CRPU 0% closed Tuesday up 0.7 per cent or S$0.005 at S$0.68.