SASSEUR Real Estate Investment Trust’s (Reit) rental income under its entrusted management agreement (EMA) model for the first quarter ended March rose 1.2 per cent year on year to 172.6 million yuan (S$32.6 million).
It is, however, 1.4 per cent down in Singapore-dollar terms due to a 2.5 per cent depreciation of yuan against Singapore dollars, said the Reit manager in a business update on Tuesday (May 14).
The moderate rise in rental income under EMA model in yuan was mainly driven by a 3 per cent rise for fixed component income of 115.2 million yuan. This was offset by a 2.2 per cent decline in the variable component of 57.4 million yuan due to a higher sales base in the first quarter last year from strong retail spending post-Covid, said the manager.
Additionally, the Reit has changed to half-yearly from quarterly distributions with effect from FY2024, to save compliance and administrative resources required for quarterly distributions.
To preserve unitholder value and minimise unit base dilution, the manager has elected to receive 20 per cent of its base management fee in cash and 80 per cent in units, as well as 100 per cent of performance management fee in cash, with effect from FY2024.
As at Mar 31, 2024, the Reit’s aggregate leverage stood at 25.2 per cent, slightly down from 25.3 per cent as at the end of 2023. Interest coverage ratio was 4.5 times, and weighted average cost of debt per year stood at 5.4 per cent.
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Net asset value per unit stood at S$0.84 at the end of March, as compared to S$0.82 at the end of 2023.
Portfolio occupancy of 97.9 per cent registered a new record high, said the manager.
Weighted average lease expiry (Wale) was 2 years by net lettable area and 1.1 years by gross revenue as at Mar 31, 2024, as the Reit took on “deliberate short leases to optimise tenant mix”. The manager highlighted that it is a strategy to adapt to fast-changing consumer preferences in China and provide flexibility to replace nonperforming tenants with new brands.
Units of Sasseur Reit : CRPU 0% closed Monday down 2.9 per cent or S$0.02 to S$0.67.
