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Sasseur REIT DPU dips 1.6% after negative impact from China lockdowns

However, it still reported a DPU of $3.410, the highest half-year DPU in four years.

Sasseur Asset Management Pte. Ltd. (SAMPL), the manager of Sasseur Real Estate Investment Trust, reported a slight decrease of 1.6% in its second quarter distribution per unit (DPU). 

The dip was attributed to a 6.5% year-on-year (YoY) decline in distributable income to $20.3m due to the impact of widespread COVID-19 lockdowns in a few major Chinese cities from mid-March to the end of May 2022.

The manager said that restrictions on inter-city travels have weighed on consumer sentiments, leading to lower YoY shopper traffic and sales in Q2 2022 at Sasseur REIT’s outlets, with the exception of the Chongqing Bishan Outlet which enjoyed stronger occupancy and sales during the quarter, following the completion of asset enhancement works in March 2022.

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Despite the dip in Q2, Sasseur REIT still announced a DPU of $3.410 for the first half of the year ending 30 June, up by 1.1% YoY. This marked the REIT’s highest first half-year DPU in four years.

The entrusted manager agreement (EMA) rental income stood at $61.30m in H1 2022, a marginal 0.5% decrease from h1 2021’s $61.59m. For Q2 2022, EMA rental income fell by 1.6% YoY to $29.13m, due to a 13.9% YoY decline in the variable component, in line with a 12.9% YoY fall in outlet sales during the same quarter.

The decline in the variable component of the EMA rental income was cushioned by the fixed component which increased 3% YoY. On a quarter-on-quarter basis, the portfolio’s outlet sales in Q2 2022 were 29.3% lower, due to retail seasonal factors such as the stronger Chinese New Year-induced consumer purchases in the first quarter of 2022.

Cecilia Tan, CEO of SAMPL said that a key driver for the results this year was the company’s proactive asset management efforts to optimise the tenant mix at the outlets, strethne retail and lifestyle offerings and implement targeted asset enhance ment works.

“In the second quarter of 2022, the REIT’s portfolio occupancy rate has already reverted to its pre-COVID level in FY2019, against the backdrop of a slowing economy. As we move into the second half of this year with the peak retail season coming up, we will continue to roll out interactive and exciting thematic events to engage shoppers and ramp up sales. On the debt refinancing front, we remain focused on completing the exercise within the year, ahead of March 2023 maturity,” Tan added.

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