Sasseur REIT Review @ 29 August 2022

Basic Profile & Key Statistics

• Main Sector(s): Retail
• Country(s) with Assets: China
  
• No. of Properties (exclude development/associate/fund): 4

Key Indicators

Performance Highlight

EMA rental income, distributable income and DPU declined yoy mainly due to drop in variable component arising from lower sales amount which was affected by COVID-19 lockdowns from mid-March to end-May 2022.

Sales

The sales amount has dropped yoy (besides Bishan) due to COVID-19 restriction that impeded inter-city movements from mid-March to end-May 2022.

Related Parties Shareholding

• REIT sponsor's shareholding: Above median for more than 20%
• REIT manager's shareholding: ± 10% from median
• Directors of REIT manager's shareholding: Above median for more than 20%

Lease Profile

• Occupancy: ± 5% from median
• Income in SGD/Major Currencies: All income is received in RMB
• WALE: Below median for more than 20%
• Highest lease expiry within 5 years: Above median for more than 20%; Falls in 2022
• Weighted average land lease expiry: Below median for more than 20%

Debt Profile

• Gearing ratio: Below median for more than 20%
• Cost of debt: Above median for more than 20%
• Fixed rate debt %: ± 10% from median
• Unsecured debt %: 0%
• WADM: Below median for more than 20%
• Highest debt maturity within 5 years: Above median for more than 20%; Falls in 2023
• Interest coverage ratio: Above median for more than 20%

Diversification Profile

• Top geographical contribution: ± 10% from median
• Top property contribution: Above median for more than 20%
• Top 5 properties' contribution: Above median for more than 20%
• Top tenant contribution: Below median for more than 20%
• Top 10 tenants' contribution: Below median for more than 20%

Key Financial Metrics

• Property yield: Above median for more than 20%
• Management fees over distribution: Below median for more than 10%; $8.00 distribution for every dollar paid 
• Distribution on capital: Above median for more than 20%
• Distribution margin: Above median for more than 20%

Trends

*The interest coverage ratio for period 1Q 2021 and before is estimated to reflect a closer figure in accordance with the Property Funds Appendix of the Code on Collective Investment Schemes.

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

Relative Valuation

• P/NAV: Below -1SD for 1y & 3y; Below average for 5y
• Dividend Yield: Above +1SD for 1y, 3y & 5y; 

Author's Opinion

Favorable	Less Favorable
High REIT Sponsor's Shareholding	All income is received in RMB
High Directors of REIT Manager's Shareholding	Short WALE
Low Gearing Ratio	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
DPU Uptrend	Property Yield Downtrend
NAV per Unit Uptrend
Interest Coverage Ratio Uptrend

The performance has been affected by COVID-19 restriction from mid-March to end-May. Fortunately, sales has improved for the month of June. Another thing to take note would be the 100% debt maturity that falls in March 2023. From the presentation, refinancing is on track to be completed by year end.

You could also refer below for more information:

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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REIT Investing Community - Facebook Group where members share and discuss REIT topic

*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 due to 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.