Sasseur REIT Review @ 17 May 2021

Basic Profile & Key Statistics

Sasseur REIT (Sasseur) is a retail REIT that invests owns 4 outlet malls in China.

Performance Highlight

EMA rental income, distributable income and DPU increased YoY by 27.8%, 47.8% and 31.9% respectively. The huge difference is due to the temporary closure of its mall from the end of Jan to mid March 2020 as a precautionary measure to prevent the spread of COVID-19 virus in China.

Outlet sales have increased 112.6% YoY as compared to 1Q 2020. The more realistic comparison would be compared with 1Q 2019 and 4Q 2020 which are 5.8% and 8.8% lower respectively.

Related Parties Shareholding

• REIT sponsor's shareholding is high at 56.76%
• REIT manager's shareholding is low at 0.69%
• Directors of REIT manager's shareholding is high at 57.75%

Lease Profile

• Occupancy is moderate at 93.5%
• All income in RMB
• WALE is short at 1 year
• Highest lease expiry within 5 years is high at 69.2% which falls in this year
• Weighted average land lease expiry is short at 29.57 years

Debt Profile

• Gearing ratio is low at 27.6%
• Cost of debt is high at 3.3%
• Fixed rate debt % is high at 91.4%
• All debts are secured debts
• WADM is short at 2 years
• Highest debt maturity within 5 years is high at 98.2% which falls in 2023
• Interest coverage ratio is high at 7.5 times

Diversification Profile

• Top geographical contribution is moderate at 53.4%
• Top property contribution is high at 44.2%
• Top 5 properties contribution is high at 100%
• Top tenant contribution is low at 5.1% 
• Top 10 tenants contribution is low at 15.5% 

Key Financial Metrics

• Property yield is high at 8% 
• Management fees over distribution is high at 10.3% in which unitholders receive S$ 9.71 for every dollar paid 
• Distribution on capital is high at 5.2%
• Distribution margin is high at 63.8%

Trends

• Uptrend - NAV per Unit, Interest Coverage Ratio
• Slight Uptrend - DPU
• Flat - Distribution on Capital, Distribution Margin
• Downtrend - Property Yield

Relative Valuation

• Dividend Yield - Latest 4 quarters DPU @ 6.97 cents / average yield @ 8.57% = S$ 0.815
• Price/NAV - NAV @ S$ 0.92 x average P/NAV @ 0.87= S$ 0.80

Author's Opinion

Favorable	Less Favorable
High REIT Sponsor's Shareholding	Low REIT Manager's Shareholding
High Directors of REIT Manager's Shareholding	All income in RMB
Low Gearing Ratio	Short WALE
High Fixed Rate Debt %	Concentrated Lease Expiry
High Interest Coverage Ratio	Short Weighted Average Land Lease Expiry
Low Top Tenant & Top 10 Tenants Contributions	High Cost of Debt
High Property Yield	0% Unsecured Debt
Competitive Management Fees	Short WADM
High Distribution on Capital	Concentrated Debt Maturity
High Distribution Margin	High Top Property & Top 5 Properties Contributions
NAV per Unit Uptrend	Property Yield Downtrend
Interest Coverage Ratio Uptrend

Sasseur performance has improved YoY (better than pre-COVID time) without any inorganic growth through acquisition for the past 3 years of listing. Hopefully, the manager could take advantage of its low gearing and have a yield accretive acquisition soon. 

For more information, you could refer to:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

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*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.