Sasseur Reit Q1 DPU falls 19.4% to 1.334 S cents

SASSEUR Real Estate Investment Trust (Sasseur Reit), which owns outlet malls in China, posted a 19.4 per cent drop in its distribution per unit (DPU) to 1.334 Singapore cents for its first quarter ended March 31, 2020, from 1.656 cents a year ago.

The Reit's rental income under its entrusted management agreements (EMA) fell 10.1 per cent to S$27.6 million for the quarter, from S$30.7 million the year prior, according to its results released on Thursday.

Excluding straight-line adjustment, EMA rental income was down 18.2 per cent to S$25.3 million, from S$30.9 million a year ago. This was partly due to the weakening of the yuan against the Singapore dollar by 1.4 per cent, the manager said.

The Reit's total outlet sales for the quarter fell 55.7 per cent year on year to 671.5 million yuan (S$134.4 million) due to the temporary closure of all four of its outlet malls for 44 to 49 days as part of Covid-19-related precautionary measures.

Income available for distribution to unitholders fell 18.7 per cent year on year to S$16 million from S$19.7 million.

The distribution will be paid out on June 26, after books closure on May 29.

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On its outlook, the manager said Sasseur Reit is in a position to recover its performance from the second quarter of 2020. Intensive marketing efforts, online engagement and event organisation have helped generate and retain customer interest and mitigate the Covid-19 impact during the period.

Moreover, China is also among the first countries to begin recovering and restarting its economy since April 2020.

The manager plans to undertake asset enhancement initiatives during the second quarter. This includes repositioning its Chongqing outlets as a lifestyle and shopping destination. Block B of its Hefei outlets will also be repositioned into a sports-themed shopping complex.

Anthony Ang, chief executive officer of the manager, said rental income in the first quarter has been less impacted by disruptions from the Covid-19 pandemic compared to other malls and Reits, due to the EMA rental income model.

"Supported by a strong team organising special events, our sales are recovering steadily and our VIP member base has increased despite the challenges brought on by Covid-19," he added.

Units of Sasseur Reit were down 0.5 Singapore cent or 0.7 per cent to 71.5 cents as at 11.40am on Thursday, after the results were released.