Sasseur REIT reports 2Q19 rental income beat IPO forecasts in yuan terms

Hong Kong money-changer with yuan symbol signHong Kong money-changer with yuan symbol sign. Photo taken pre-Covid

Sasseur REIT reported Tuesday its second quarter effective market area (EMA) rental income was 146 million yuan, beating its IPO forecast by 1.3 percent.

However, in Singapore dollar terms, EMA rental income was S$29.1 million, 0.3 percent shy of the projection from the projection in the REIT’s IPO prospectus, the Chinese outlet-mall owner said in a filing to SGX. The exchange rate was 5.0094 yuan to the Singapore dollar, compared with the IPO projection for 4.930 yuan, the filing said.

The distribution per unit (DPU) for the quarter was 1.608 Singapore cents, 10.5 percent higher than the 1.455 Singapore cents projected in the IPO prospectus, Sasseur REIT said.

“Although the second quarter is seasonally a period with lower customer traffic for the retail industry, our DPU continues to outperform projections which bodes well for Sasseur’s overall performance this year,” Anthony Ang, CEO of Sasseur Asset Management Pte. Ltd. (SAMPL), the REIT’s manager, said in the statement.

“Despite the on-going trade tension between U.S. and China, our outlet sales in China has not been impacted by external trade factors as it is largely fueled by domestic consumption,” Ang added. “For the third quarter, we are cautiously optimistic that sales and footfall will pick up again in view of Sasseur’s major overnight annual promotion events that will be held in September.”

For the first half, EMA rental income was S$60.61 million, 1.1 percent higher than the IPO projection, while DPU was 3.264 Singapore cents, 9.9 percent higher than the IPO projection, the filing said.

The portfolio had an occupancy rate of 95.8 percent at quarter-end, the filing said.

Sasseur REIT’s portfolio has four retail outlet malls located in fast-growing Chinese cities, including Chongqing, Kunming, Bishan and Hefei, the filing said.

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