[SINGAPORE] The global tariffs imposed by the US and the push by the Chinese government to boost domestic consumption provide Sasseur Real Estate Investment Trust (Sasseur Reit), which owns four outlet malls in China, with a “window of opportunity” to grow, said the Reit manager on Thursday (May 15).
Speaking at the Reit’s earnings brief for the first quarter ended Mar 31, Xie Jianfeng, the chief financial officer of the Reit manager, said that the Reit recorded “resilient growth” in Q1 as the China government pushed forward with efforts to stimulate local consumption.
On Mar 16, the State Council outlined a plan to boost domestic consumption and make it the primary driver of economic growth.
“So we will see a wider availability of our product range in the months to come,” said Cheng.
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Overall, Q1 sales have not been affected by the US tariffs imposed on China as more than 95 per cent of the brands stocked at its stores are imported from Europe or made in China, he added.
Lower rental income
Sasseur Reit’s rental income under its entrusted management agreement (EMA) model for the first quarter ended March rose 1.6 per cent year on year to 175.4 million yuan (S$32.5 million), from 172.6 million yuan.
However, rental income was 0.2 per cent lower in Singapore dollar, mainly due to depreciation of yuan against Singapore dollars, said the Reit manager.
The moderate rise in rental income under EMA model in yuan was mainly due to a 3 per cent rise in fixed component income to 118.7 million yuan from 115.2 million yuan in the previous corresponding period. This was offset by a slight dip of 1.2 per cent fall in variable component income year on year to 56.7 million yuan, from 57.4 million yuan, which was in line with the 0.9 per cent fall in outlet sales.
As at Mar 31, 2025, the Reit’s aggregate leverage stood at 25.9 per cent, slightly higher from 24.8 per cent as at the end of 2024. Interest coverage ratop was 4.7 times, compared with 4.6 times as at last December.
Weighted average cost of debt per year stood at 5 per cent as at Mar 31, 2025, down from 5.3 per cent at the end of 2024.
In terms of debt maturities, the Reit had an improved average debt maturity of three years as at Mar 2025. This is due to an undrawn revolving credit facility of S$10 million, which is available to meet future obligations, the manager said.
Sizeable debt headroom had also decreased to S$815.7 million, from S$895.3 million as at the end of the previous year.
Portfolio occupancy and sales
For portfolio occupancy rate, Sasseur Reit maintained a stable high rate of 98.9 per cent, the same from the year ago period. This was partially driven by higher occupancy at the Chongqing Bishan outlet, where occupancy inched up 0.1 per cent to 97.1 per cent due to effective leasing strategy and a record high occupancy in the Kunming outlet, where it reached 99.8 per cent occupancy following successful asset enhancement in 2024.
However, the Reit’s portfolio sales has declined slightly by 0.9 per cent to 11 million yuan, primarily due to weaker performance at the Hefei and Kunming outlets, but was partially offset by stronger sales at the Chongqing Liangjiang outlet, which was driven by a broader range of new product offerings, the manager added.
For the first two months of the year, portfolio sales rose 1.2 per cent year on year, due to strong consumer demand during Chinese New Year promotional events. However, sales softened across all outlets in March 2025.
Nevertheless, the decline in sales for March – which is less than 6 per cent year on year – is not “a major concern” as consumption fatigue is normal among shoppers after the Chinese New Year festive season in January and February, said Cheng.
He expects sales for April and May to improve due to the impact of US tariffs.
Expansion plans
Cheng said that the manager is working “vigorously and furiously” with its sponsor to acquire malls managed by the sponsor.
He noted that the sponsor manages 18 outlets, of which four are part of the Reit, two are outlets which give the Reit the right of first refusal (ROFR) to acquire them, and the remaining are third-party outlets under an external developer.
He said that apart from acquiring the ROFR outlet malls, which are located in Xi’an and Guiyang, the manager is also looking into acquiring a third-party outlet mall. He added that some third-party malls are located in cities which see high shopper traffic and post year-on-year improvement in sales.
Succession plans
During the briefing, Helen Qiu, head of investor relations and capital markets at Sasseur Reit, addressed questions regarding the Reit’s succession plans.
On Apr 30, the manager announced that its chief executive officer Cecilia Tan would be stepping down on Oct 28 to pursue other professional interests, after four years in the role.
Tan was not present at Thursday’s briefing. Qiu explained that Tan had begun her garden leave following her resignation, and that the manager is reviewing candidates for the CEO position.
“Business operations will continue as usual because we believe we have a very strong and capable team in place to take care of all aspects of the business,” said Qiu.
Units of Sasseur Reit were trading 1.6 per cent or S$0.01 lower at S$0.63 as at 1.03 pm on Thursday.
