Sasseur REIT has reported a distribution per unit (DPU) of 1.76 cents for its 1QFY2021 ended March after 10% of its distributable income was retained for asset enhancement initiatives (AEIs) and expansion plans. 

The DPU of 1.76 cents translates to y-o-y growth of 31.9% from 1.33 cents previously, but a 9.7% dip from the previous quarter’s DPU of 1.93 cents.

The REIT, which owns four retail outlet malls in China, recorded a 47.8% y-o-y increase in distributable income to $23.6 million for the period, which the manager of Sasseur REIT attributes to strong business recovery as well as AEIs.

EMA rental income excluding straight line adjustments grew 27.8% y-o-y to $32.3 million, primarily driven by its variable component which more than doubled from RMB 24.8 million ($5.1 million) to RMB 51.9 million y-o-y, reflecting a recovery in sales. The manager highlights that 1QFY2021 sales have rebounded significantly by 112.6% to RMB1.1 billion as compared to the year before, when Sasseur REIT closed its outlets for approximately 7 weeks due to the outbreak of Covid-19.

Portfolio occupancy has been maintained at at 93.5% as of 1QFY2021, with a weighted average lease to expiry (WALE) of 2.6 years.

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Sasseur REIT highlighted measures it has taken to enhance its retail portfolio, including reviewing its trade mix to identify and groom “retail champions”, merging the operations of Sasseur Chongqing and Bishan outlets, and intensified marketing and customer engagement efforts which saw VIP membership grow 6.8% q-o-q.

Sasseur REIT’s aggregate leverage stood as at 27.6% as at March 31, while cash and short term deposits stood $155.9 million.

Vito Xu, chairman of the manager, says, the strong recovery in China’s economy has boosted retail sales momentum, underpinning an “encouraging start to 2021” for the REIT. 

“Looking ahead, the retail outlet industry will continue to be resilient during the pandemic as demand from domestic consumers remain high in China. Sasseur’s superior operational competence, combined with our efforts in enhancing our online presence will continue to help us capture a greater share of the outlet market in China,” says Anthony Ang, CEO of the manager.

As at 10.16am, units in Sasseur REIT are down 1.5 cents or 1.62% lower at 91 cents.