Distributable income stands at S$42.4 million for the period, down 0.6% from S$42.7 million in H1 2024

 

[SINGAPORE] The manager of Sasseur Real Estate Investment Trust (Reit) : CRPU +0.72% on Thursday (Aug 14) said that its distribution per unit (DPU) for the first half of FY2025 fell 3.1 per cent to S$0.03055, from S$0.03153 in the same period the year prior. 

 

Rental income under the Reit&rsquo s entrusted management agreement (EMA) model stood at 336.2 million yuan (S$59.9 million) in H1 2025, up 2.2 per cent year on year from 329 million yuan, underpinned by a solid rebound in second-quarter sales. 

 

The fixed component increased 3 per cent year on year, while the variable component rose marginally by 0.3 per cent, supported by 0.8 per cent year-on-year growth in portfolio outlet sales. 

 

In Singapore dollar terms, EMA rental income declined 1.6 per cent year on year to S$61.3 million from S$62.3 million, primarily due to the 3.7 per cent year-on-year depreciation of the yuan.

 

Distributable income stood at S$42.4 million for the period, down 0.6 per cent from S$42.7 million in H1 2024. 

 

The distribution will be paid on Sep 26, with a record date of Sep 12. 

 

The initial portfolio of the Reit consists of four retail outlet mall assets located in Chinese cities such as Chongqing, Kunming and Hefei, with a combined net lettable area (NLA) of 310,241 square metres.

 

The Reit&rsquo s portfolio occupancy in Q2 stood at 98.5 per cent. Its Chongqing Liangjiang outlet remained fully occupied, while its Kunming outlet recorded a 99.9 per cent occupancy level following asset enhancement works completed in 2024. 

 

The manager said on Thursday that this is due to active asset management initiatives, including tenant mix optimisation, strategic collaborations with leading brands, and enhanced loyalty engagement through tailored VIP services and promotions.

 

Aggregate leverage stood at 25.8 per cent, with an interest coverage ratio of 4.7 times as at Jun 30. Its weighted average cost of borrowings for the period ended Jun 30 was 4.8 per cent. 

 

The Reit&rsquo s weighted average lease expiry by NLA is 1.7 years as at Jun 30. 

 

On Feb 19 and Jun 6, Sasseur Reit obtained two tranches of five-year unsecured interest-bearing loans from a wholly owned subsidiary of the sponsor. The first offshore sponsor loan tranche was valued at 430 million yuan, and the second at 508 million yuan. 

 

Additionally, on May 14, the manager of the Reit said its wholly owned subsidiary Kunming Sasseur Commercial Management secured its maiden onshore green loan of 308 million yuan from OCBC China for a tenure of 10 years from the first utilisation date. 

 

Vito Xu, chairman of Sasseur Asset Management, the manager of Sasseur Reit, said that he remains &ldquo cautiously optimistic&rdquo about the second half of 2025, even though China&rsquo s gross domestic product expanded 5.3 per cent year on year in H1, closely tracking the government&rsquo s full-year growth target of around 5 per cent. 

 

&ldquo While macroeconomic uncertainties remain, China&rsquo s stable growth and policy support provide a favourable backdrop (for the Reit),&rdquo he added. 

 

Sasseur Cayman Holding, the sponsor of Sasseur REIT, will be giving a 5-year loan of up to RMB508 million.

 

The rate is pegged to China' s 5-year loan prime rate.

 

According to Sasseur REIT, this loan is to help repay an offshore loan due next March.

 

As this loan from the sponsor is denominated in RMB, there will be cost savings for the REIT.

However, rental income was lower in Singapore dollar, due to depreciation of yuan

 

[SINGAPORE] The global tariffs imposed by the US and the push by the Chinese government to boost domestic consumption provide Sasseur Real Estate Investment Trust (Sasseur Reit : CRPU -1.56%), which owns four outlet malls in China, with a &ldquo window of opportunity&rdquo to grow, said the Reit manager on Thursday (May 15).

 

Speaking at the Reit&rsquo s earnings brief for the first quarter ended Mar 31, Xie Jianfeng, the chief financial officer of the Reit manager, said that the Reit recorded &ldquo resilient growth&rdquo in Q1 as the China government pushed forward with efforts to stimulate local consumption.

 

On Mar 16, the State Council outlined a plan to boost domestic consumption and make it the primary driver of economic growth.

 

&ldquo So we will see a wider availability of our product range in the months to come,&rdquo said Cheng.

 

Overall, Q1 sales have not been affected by the US tariffs imposed on China as more than 95 per cent of the brands stocked at its stores are imported from Europe or made in China, he added.

 

Lower rental income

Sasseur Reit&rsquo s : CRPU -1.56%rental income under its entrusted management agreement (EMA) model for the first quarter ended March rose 1.6 per cent year on year to 175.4 million yuan (S$32.5 million), from 172.6 million yuan.

 

However, rental income was 0.2 per cent lower in Singapore dollar, mainly due to depreciation of yuan against Singapore dollars, said the Reit manager.

 

The moderate rise in rental income under EMA model in yuan was mainly due to a 3 per cent rise in fixed component income to 118.7 million yuan from 115.2 million yuan in the previous corresponding period. This was offset by a slight dip of 1.2 per cent fall in variable component income year on year to 56.7 million yuan, from 57.4 million yuan, which was in line with the 0.9 per cent fall in outlet sales.

 

As at Mar 31, 2025, the Reit&rsquo s aggregate leverage stood at 25.9 per cent, slightly higher from 24.8 per cent as at the end of 2024. Interest coverage ratop was 4.7 times, compared with 4.6 times as at last December.

 

Weighted average cost of debt per year stood at 5 per cent as at Mar 31, 2025, down from 5.3 per cent at the end of 2024.

 

In terms of debt maturities, the Reit had an improved average debt maturity of three years as at Mar 2025. This is due to an undrawn revolving credit facility of S$10 million, which is available to meet future obligations, the manager said.

 

Sizeable debt headroom had also decreased to S$815.7 million, from S$895.3 million as at the end of the previous year.

 

Portfolio occupancy and sales

For portfolio occupancy rate, Sasseur Reit maintained a stable high rate of 98.9 per cent, the same from the year ago period. This was partially driven by higher occupancy at the Chongqing Bishan outlet, where occupancy inched up 0.1 per cent to 97.1 per cent due to effective leasing strategy and a record high occupancy in the Kunming outlet, where it reached 99.8 per cent occupancy following successful asset enhancement in 2024.

 

However, the Reit&rsquo s portfolio sales has declined slightly by 0.9 per cent to 11 million yuan, primarily due to weaker performance at the Hefei and Kunming outlets, but was partially offset by stronger sales at the Chongqing Liangjiang outlet, which was driven by a broader range of new product offerings, the manager added.

 

For the first two months of the year, portfolio sales rose 1.2 per cent year on year, due to strong consumer demand during Chinese New Year promotional events. However, sales softened across all outlets in March 2025.

 

Nevertheless, the decline in sales for March &ndash which is less than 6 per cent year on year &ndash is not &ldquo a major concern&rdquo as consumption fatigue is normal among shoppers after the Chinese New Year festive season in January and February, said Cheng.

 

He expects sales for April and May to improve due to the impact of US tariffs.

 

Expansion plans

Cheng said that the manager is working &ldquo vigorously and furiously&rdquo with its sponsor to acquire malls managed by the sponsor.

 

He noted that the sponsor manages 18 outlets, of which four are part of the Reit, two are outlets which give the Reit the right of first refusal (ROFR) to acquire them, and the remaining are third-party outlets under an external developer.

 

He said that apart from acquiring the ROFR outlet malls, which are located in Xi&rsquo an and Guiyang, the manager is also looking into acquiring a third-party outlet mall. He added that some third-party malls are located in cities which see high shopper traffic and post year-on-year improvement in sales.

 

Succession plans

During the briefing, Helen Qiu, head of investor relations and capital markets at Sasseur Reit, addressed questions regarding the Reit&rsquo s succession plans.

 

On Apr 30, the manager announced that its chief executive officer Cecilia Tan would be stepping down on Oct 28 to pursue other professional interests, after four years in the role.

 

Tan was not present at Thursday&rsquo s briefing. Qiu explained that Tan had begun her garden leave following her resignation, and that the manager is reviewing candidates for the CEO position.

 

&ldquo Business operations will continue as usual because we believe we have a very strong and capable team in place to take care of all aspects of the business,&rdquo said Qiu.

 

The CEO of the manager of Sasseur REIT, Cecilia Tan, has discontinued her employment with the manager effective Oct 28, 2025, according to a bourse filing on Apr 30.

 

Tan will be pursuing other professional interests, the release reads. In the meantime, the board is in the process of identifying a suitable candidate to act as the CEO.

 

Tan joined the manager as CEO-Designate in July 2021 and assumed the position of CEO in August that same year.

 

Sasseur REIT focuses on retail malls across Asia with an emphasis on China. It has a portfolio in major Chinese cities like Chongqing, Hefei and Kunming.

 

The REIT employs a Entrusted Management Agreement (EMA) model in its operations, in which the sponsor, Sasseur Group is responsible for managing the day-to-day operations of the outlets including driving tenant sales. This is unlike that of most retail REITs in China and other local and foreign REITs listed on the SGX.

 

The experience of local investors with S-REITs with Chinese assets hasn&rsquo t been a bed of roses so far. At one point, three S-REITs with Chinese assets and a property trust were listed. They were CapitaLand China Trust , Sasseur REIT, EC-World REIT and Dasin Retail Trust . Mapletree Logistics Trust has 18.5% of its assets under management in China, which were blamed for its 2.7% decline in distribution per unit as at the end of 2024.

 

The main risk with the non-CapitaLand, non-Mapletree REITs is the &ldquo key man&rdquo risk. In the world of S-REITs, this refers to the sponsor. For instance, EC-World REIT&rsquo s sponsor was responsible for more than 80% of the REIT&rsquo s rental income through master leases. Similarly, Dasin Retail Trust&rsquo s sponsor contributed around 70% to its rental income.

 

Sasseur REIT&rsquo s rental income is based on the entrusted management agreement (EMA) model. The starting point is the cash flow from tenant sales (less expenses) of its four outlet malls: Chongqing Liangjian Outlet, Chongqing Bishan Outlet, Kunming Outlet and Hefei Outlet. Unlike the retail REITs in Singapore, where base rent comprises the main part of their gross rental income, Sasseur REIT&rsquo s rent comes mainly from tenant sales. The &ldquo entrusted manager&rdquo takes all the cash flow from tenant sales and, after expenses and fees, pays this out to unitholders.

 

The EMA comprises a fixed portion and a variable portion. At IPO, the fixed portion was 70% of the REIT&rsquo s income and the variable portion was 30%. The fixed portion grows by 3% a year. In good times, the fixed portion is less than 70% as the variable portion rises and in bad times, the fixed portion is a bit above 70% because the variable portion falls. The variable portion comprises 4% of the Chongqing LiangJiang Outlet&rsquo s sales, 4.5% of the Chongqing Bishan Outlet&rsquo s sales, 5% of the Kunming Outlet&rsquo s sales and 5.5% of the Hefei Outlet&rsquo s sales.

 

&ldquo We wanted to give unitholders a link to the underlying leases with the variable portion but also protection in income with the fixed portion,&rdquo says Cecilia Tan, CEO of Sasseur REIT&rsquo s manager.

 

During a results briefing on Feb 20, analysts asked about the strength of the sponsor and its ability to support the REIT. To demonstrate the sponsor&rsquo s resilience, Tan says that the sponsor gave its staff a group bonus of RMB77 million ($14.2 million) in 2024.

The sponsor group also supported its refinancing because it owns 57% of the REIT. In 2023, during a refinancing exercise, the REIT unbundled Kunming Outlet to keep it unencumbered with a sponsor loan. The Chongqing Liangjiang Outlet, Chongqing Bishan Outlet and Hefei Outlet were bundled together for a syndicated loan. Part of the reason was to have staggered debt maturities.

 

&ldquo The sponsor offered a short-term loan as we sourced for a permanent loan structure. Subsequently, the sponsor gave us a five-year extension. There was no mortgage or share pledge to the sponsor and it took away the concentration risk,&rdquo Tan elaborates.

 

Earlier this year, Sasseur REIT obtained an AAA rating from China Lianhe Credit Company, a major rating agency in China. &ldquo The rating agency sent people to visit our four malls and talk to the management team. They stress-tested the interest cost and sales to see if we are of investment grade. After stress testing, they concluded that we qualify as AAA,&rdquo Tan says.

 

She acknowledged that a rating paved the way for the issue of panda bonds. Sasseur REIT&rsquo s next refinancing is in 2026 when the REIT could diversify its sources of debt with a panda bond.

 

The REIT&rsquo s capital management is part of its conservative stance under Tan. To grow DPU though, tenant sales have to rise, and this is directly related to China&rsquo s consumer spending.

The distribution will be paid on Mar 27, after the record date on Mar 18

 

THE manager of Sasseur Real Estate Investment Trust : CRPU 0% (Reit) on Thursday (Feb 20) posted a distribution per unit (DPU) of S$0.02929 for the second half ended December, up 0.1 per cent from S$0.02927 in the previous corresponding period.

 

This was supported by resilient rental income under the Reit&rsquo s entrusted management agreement (EMA) model. EMA rental income for the second half rose 0.8 per cent on the year to 335.1 million yuan (S$62.8 million) from 332.5 million yuan. 

 

This brought distributable income up 3.1 per cent to S$40.6 million from S$39.4 million previously. The rise in distributable income was attributed to lower finance cost and tax expenses.

 

The distribution will be paid on Mar 27, after the record date on Mar 18.

 

For the full year, DPU was 2.7 per cent lower year on year at S$0.06082 from S$0.06249. This was mainly attributed to a lower DPU recorded for the first half, as well as higher retention to support onshore loan principal amortisation and future capital expenditures.

 

Distributable income fell 0.1 per cent to S$83.3 million from S$83.4 million. 

 

EMA rental income for the full year rose 0.9 per cent to 664.1 million yuan from 658.5 million yuan. This was driven by a 3 per cent rise in the fixed component, which offset a 3.7 per cent decline in the variable component, in line with a 3.9 per cent drop in the portfolio&rsquo s outlet sales.

 

In Singapore dollars, however, EMA rental income for the full year fell 0.4 per cent to S$124.5 million from S$124.9 million, primarily due to currency translation effects.

 

Cecilia Tan, chief executive of the manager, highlighted the steady recovery in the Reit&rsquo s outlet sales, which rose 4.8 per cent year on year in Q4, reversing the downward trend in the first three quarters. This was attributed to &ldquo strong performance during (China&rsquo s) Golden Week and year-end promotional campaigns&rdquo .

 

Outlet sales for the full year, however, declined 3.9 per cent due to unforeseen natural hazards, including severe heatwaves in Chongqing and earthquakes in Hefei which impacted shopper traffic. There was also a fall in consumers&rsquo overall purchasing power.

 

Throughout the year, Sasseur Reit undertook four major asset enhancement initiatives. As a result, its portfolio occupancy reached an all-time high of 98.9 per cent in Q4 &ndash an increase of 1.3 percentage points on the year.

 

Valuation of the four China outlets owned by the Reit stood at about 8.4 billion yuan as at end-December, a slight decline of 0.9 per cent on the year.

 

As at end-December, Sasseur Reit&rsquo s aggregate leverage stood at 24.8 per cent, and its interest coverage ratio strengthened to 4.6 times. About 87 per cent of its total borrowings are hedged to fixed rates or pegged to stable interest rates, with a weighted average debt to maturity of 2.5 years.

 

Tan noted that preliminary sales data from this year&rsquo s Chinese New Year period indicated &ldquo strong buying momentum, with a double-digit sales growth across the portfolio&rsquo s outlets in January 2025&rdquo .

 

&ldquo Given these positive indicators, we remain cautiously optimistic about the sales outlook for our portfolio&rsquo s outlets in 2025,&rdquo she added.