Sasseur REIT Review @ 18 November 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

In SGD term, EMA rental decline slight while distributable income and DPU improved slightly yoy.

Sales

Besides Hefei Outlets, all outlet sales amount has dropped yoy. The decline is due to the local government's directives to conserve electricity during the heatwave period in Aug which affected Chongqing Liangjiang and Chongqing Bishan Outlets as well as temporary closures of Chongqing Bishan and Kunming Outlets due to the COVID cases.

Asset Enhancement Initiatives

AEI of Chongqing Liangjiang Outlets VIP Lounge is in progress and expected to be completed by this year-end.

Sensitivity to Interest Rate

For every 1% increase in interest rate, DPU impact would be 0.2 cents, which is equivalent to 2.8%.

Related Parties Shareholding

• REIT sponsor's shareholding: Above median for more than 20%
• REIT manager's shareholding: Above median for more than 10%
• 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 2023
• 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%; $7.81 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
• Slight Uptrend: Distribution Margin
• Flat: Occupancy, Distribution on Capital
• Downtrend: Property Yield

Relative Valuation

• Current 52 Weeks Range: 48%
• P/NAV: Average for 1y, 3y & 5y
• Dividend Yield: Above average for 1y & 5y; Above +1SD for 3y

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

Despite the COVID-19 outbreak and the government's directives to conserve electricity that impacted variable component income, the performance is improved as compared to the previous quarter. For its debt expiring in March 2023, management indicates that it is now in the advanced stages.

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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*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.