Sasseur REIT's 1H FY24 Result Review

Basic Profile & Key Statistics

Key Indicators

Performance Highlight

EMA rental income in both RMB and SGD remained stable YoY. However, distributable income and DPU declined YoY due to a combination of lower management fees paid in units, reduced forex gains, higher finance expenses (from changes in borrowing cost treatment), and increased retention.

Sales

Portfolio sales dropped by 3.9% YoY.

Asset Enhancement Initiatives

AEI for the Kunming outlet began in April and is expected to finish this month.

Related Parties Shareholding

The REIT sponsor, REIT manager, and directors of the REIT manager hold a relatively high proportion of shareholding.

Lease Profile

Income is entirely in RMB. WALE and weighted average land lease expiry are both short, with concentrated lease expiries.

Debt Profile

The debt profile is mixed: low gearing, high interest coverage, and a high fixed-rate debt proportion are positives, but high debt costs, maturity concentration in 2026, and low unsecured debt proportion are less favorable.

Diversification Profile

The portfolio is tenant-diversified but property-concentrated.

Key Financial Metrics

Overall, the financial metrics are favorable.

DPU Breakdown

• TTM Distributable Income Breakdown:
• 83.2% from Operation
• 9% from Management Fees Paid in Units
• 7.9 being Retained

Trends (Up to 10 Years)

• Uptrend: DPU from Operations, Adjusted Interest Coverage Ratio, Operating Distributable Income on Capital, Operating Distributable Income Margin, Operating Distribution Proportion
• Slight Uptrend: Committed Occupancy
• Flat: NAV per Unit, Operating Distributable Income over Manager's Fees
• Slight Downtrend: Property Yield

Price Range & Relative Valuation Metrics

• Dividend Yield - Below -1SD for 1y; Average for 3y, 5y & 10y
• P/NAV - Below -1SD for 1y, 3y, 5y & 10y

Author's Opinion

As compared to the previous half-year, EMA rental income remains similar.  However, distributable income and DPU have improved mainly due to lower tax expenses. For debt, there is no refinancing requirement until March 2025.

For more information, check out:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and details of Singapore REIT

REIT Review - List of previous REIT review posts

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my findings and should not be considered professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.