Sasseur REIT’s 4Q18 distribution per unit beat IPO forecasts

China yuan coins

Sasseur REIT reported on Monday its distribution per unit (DPU) for the fourth quarter was 1.999 Singapore cents, 28.1 percent above the forecast from its IPO prospectus for 1.561 Singapore cents.

EMA, or entrusted management agreement, rental income, was S$30.95 million for the quarter ended 31 December, 1.6 percent above the IPO forecast for S$30.09 million, it said in a filing to SGX after the market close on Monday. Under the EMA agreement, Sasseur REIT has appointed Sasseur Shanghai as its entrusted manager to manage its properties; the REIT collects fees from the entrusted manager, which also provides a minimum rent.

“The good performance was mainly due to the year-end promotional events across all the four outlet malls, which attracted a good turnout of customers, leading to strong sales,” the REIT said in the statement.

Vito Xu, chairman of Sasseur Asset Management (SAMPL), the REIT’s manager, noted the factory outlet mall owner posted a distribution yield of 10.3 percent, double the level for the FTSE ST REIT Index, as of end-December.

“China’s softening economic growth has generally resulted in slower sell-through rate of branded products in full price stores; this increased supply for outlets. In slower economic environment, customers also actively look for bargains and this has benefited Sasseur’s business,” Vito said. “Sasseur’s outlets has therefore been able to offer more choices and better value-for-money purchases to their customers, boosting our
outlet sales.”

Anthony Ang, CEO of SAMPL, pointed to plans to pursue both organic and inorganic growth for the REIT: For organic growth, it would pursue initiatives such as expanding its VIP membership to generate more repeat sales, improve occupancy rates and use asset enhancement initiatives. For inorganic growth, the REIT would actively seek acquisitions, with a preference for China projects managed by the REIT’s sponsor, he said.

For the full year, Sasseur REIT reported DPU of 5.128 Singapore cents, 12.6 percent above the IPO forecast for 4.554 Singapore cents. Full year EMA rental income was S$93.53 million, 2.2 percent above the IPO forecast, it said.

Sasseur REIT has a portfolio of four outlet malls in China, located in Chongqing, Bishan, Hefei and Kunming.

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