The manager of Sasseur REIT announced that its 4QFY2020 distribution per unit (DPU) has increased by 18.8% to 1.935 cents from 1.629 cents a year ago, with income available for distribution to unitholders coming in 19.7% higher at $23.3 million from 19.5 million in 4QFY2019.
This brings FY2020 DPU to 6.545 cents, 0.2% higher than 6.533 cents last year. This is attributable to the rapid rebound of the Chinese economy in the second half of 2020, following China’s stringent control of Covid-19, as well as the strong operational capabilities of and proactive asset management actions taken by the entrusted manager, lower tax expenses and a strengthening RMB.
During the quarter ended December, total Entrusted Management Agreement (EMA) rental income came in at RMB 159.1 million, 2.1% lower y-o-y. This was mainly due to a 10.0% y-o-y drop in the variable component to RMB 56.7 million, while this was partially offset by a 3.0% y-o-y increase in the fixed component to RMB 102.4 million.
EMA rental income (exclude straight-line adjustments) came in at $32.3 million in 4QFY2020, 2.5% higher than $31.5 million in 4QFY2019.
Sasseur REIT’s portfolio occupancy level remained stable at 93.5% in 4QFY2020, while weighted average lease expiry (WALE) by NLA stands at 2.6 years and by gross revenue at 1.1 years. Anthony Ang, CEO of the manager explains during the results briefing that the WALE has been deliberately kept short to allow the REIT to frequently review tenant performance and plan the tenant mix based on customer trends on a more frequent basis.
Vito Xu, chairman of the manager says, “We are very encouraged with the better than expected full year performance of Sasseur REIT in 2020 considering that the Covid-19 pandemic led to significant business disruptions and losses globally. Among the nine retail REITs listed on SGX, Sasseur REIT was the only REIT with positive returns. We are heartened that we have delivered total returns of 24.6% to investors since IPO in March 2018.”
Ang adds, “Our EMA Rental Income has remained resilient. This underscores the strength of our business model which mitigated risks through the fixed and variable components of rental income. Sasseur REIT’s large and diversified tenant base with low dependence on any single tenant or trade sector will continue to underpin its portfolio resilience.”
As at 9.00am, units in Sasseur REIT are trading at 84 cents.