Sasseur Reit’s Q4 DPU falls 31.5% to S$0.01302

SASSEUR Real Estate Investment Trust (Reit) posted a 31.5 per cent decline in its fourth quarter (Q4) distribution per unit (DPU) to 1.302 Singapore cents, from 1.9 Singapore cents the previous year.

This includes a higher retained distributable income of S$3.9 million to fund transaction costs of refinancing. The amount represents a 21.2 per cent year-on-year increase from the previous year’s retained distributable income of S$2.2 million.

The Q4 distribution will be paid out to unitholders on Mar 28.

Distributable income for the quarter fell 21.2 per cent on year to S$19.9 million from S$25.3 million previously.

The decline in distributable income was mainly attributed to widespread Covid-19 outbreaks in China during the last quarter of 2022, which led to mandated temporary closures and shorter operating hours at Sasseur Reit’s four outlets.

Lockdowns and intercity travel restrictions further dampened consumer sentiments in China, said the manager on Friday (Feb 17).

The Reit’s rental income under its entrusted management agreements for the quarter was S$27 million excluding straight-line adjustments, down 19.5 per cent from S$33.6 million the previous year.

Portfolio occupancy reached 97.2 per cent over Q4, which the Reit manager highlighted as an all-time high. It surpasses FY20219’s pre-Covid occupancy of 96 per cent and came on the back of new leases secured and tenant mix adjustments at the Reit’s Hefei outlets.

For the second half of the year ended December 2022, the Reit’s DPU was down 15.8 per cent to 3.14 Singapore cents from 3.731 Singapore cents previously. Distributable income over the half-year period fell 10.5 per cent to S$43.4 million.

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The latest set of results brings the Reit’s DPU for the full year to 6.55 Singapore cents, which is 7.8 per cent lower than its FY2021 DPU of 7.104 Singapore cents. Distributable income for the whole of FY2022 stood at S$88.5 million, down 5.8 per cent from the previous year’s S$93.9 million. 

A total of 9.2 per cent of FY2022’s distributable income was retained. This translates to some S$8.2 million retained, widening 6.1 per cent from the S$7.7 million retained in FY2021.

Vito Xu, chairman of the manager, noted “visible signs of recovery in the retail industry in January 2023, fuelled by pent-up consumer demand”.

“Given the outlet sector’s attractive value propositions as well as the country’s growing middle-class population segment, we believe Sasseur Reit’s outlets are well positioned to benefit from the government’s focus to promote a consumption recovery as a major driver of China’s economic growth in 2023,” he said.

Units of the Reit ended S$0.035 or 4.24 per cent lower at S$0.79 on Friday.