Operational Focus:

• Tenant Management: Strengthen relationships with tenants through regular engagement and support, ensuring high occupancy rates and tenant satisfaction.

• Customer Experience: Enhance the shopping experience for customers through innovative marketing and promotional activities, and by leveraging data analytics to understand customer preferences.

Portfolio

As of 30 Sep, the portfolio has a combined Gross Floor Area (GFA) of 377,737 sqm and a Net Lettable Area (NLA) of 310,241 sqm. Total valuation of the portfolio is approximately RMB 8,497 million.

Capital Management:

Sasseur REIT has the lowest gearing among S-REITs. Its welldiversified debt profile with a higher proportion of RMBdenominated loans provides a natural hedge against foreign exchange risks. Approximately 86% of borrowings are pegged to stable or fixed interest rates, enhancing financial stability. In 3QFY24, the weighted average cost of debt decreased to 5.3% from 5.6% at end-2023, supported by reduction in China’s loan prime rates which benefited RMB-denominated loans.

Corporate Governance and Accolades:

• Corporate Governance Ranking: Ranked 16th out of 43 REITs and Business Trusts in the Singapore Governance and Transparency Index (SGTI) 2024.

• Received several prestigious awards, including the IR Magazine Awards for Best Innovation in Shareholder Communications, The Edge Singapore Centurion Club Awards for Overall Sector Winner and Highest Weighted Return on Equity Over Three Years. 

FY23 Sustainability Initiatives:

▪ Energy Consumption: Reduced by 10.9% in Landlordcontrolled Areas.

▪ Water Consumption: Reduced by 13.9% in Landlordcontrolled Areas.

▪ Greenhouse Gas Emissions: Scope 1 and 2 Emissions Reduced by 5.0%.

REIT Overview

• Outlet Malls in China: Sasseur REIT primarily invests in premium outlet malls located in high-growth cities across China, such as Chongqing, Hefei, and Kunming. These properties are strategically positioned to benefit from the rising consumption trends among the expanding Chinese middle class.

• Experiential Retail Spaces: The REIT focuses on creating lifestyle and experiential retail spaces that combine shopping with entertainment, dining, and leisure activities. This approach aims to enhance shopper engagement and drive higher footfall and sales at their outlets.

EMA - Aligning Goals, Sharing Success

• The Entrusted Management Agreement (EMA) income offers a stable fixed component that grows at 3% annually, and includes a variable component pegged to outlet sales, offering potential income upside.

• EM fees consist of a Base Fee of up to 30% of the Gross Revenue (GR) and a Performance Fee of more than 60% of the difference between GR and the EMA Resultant Rent (RR), after deducting the Base Fee. The remaining income, after deducting the EM’s fees, is distributed to Sasseur REIT and ultimately to the Unitholders, ensuring that the EM (Sasseur (Shanghai) Holding Company Limited) is incentivized to maximize the performance of the outlets while providing stable and growing income to Sasseur REIT.

Strategic Positioning:

• Strengthened its strategic partnerships with popular brands, attracting diverse, high-quality brands, driving foot traffic and sales, and ensuring the outlets remain competitive and appealing to consumers.

• “Super Outlet” business model transforms outlets into lifestyle destinations with art, sports, kids’ activities, local culture, and seamless online-offline integration, creating a unique and engaging shopping experience for families. Examples include Matata Animal Kingdom at Sasseur (Hefei) Outlet: The first indoor zoo in Anhui Province, and the Sasseur (Kunming) Outlet Vito Driving School for Children.

Outlook for Outlet Industry:

The long-term outlook for China’s outlet industry remains positive, driven by the growing middle class and urbanization. By 2025, outlet sales in China could reach as much as RMB 390 billion.

Key Risks:

DBS maintain key risks for Sasseur REIT include potential further downside risk to tenant sales, weak consumer sentiment, foreign exchange risk, interest rate risk, operational disruptions from asset enhancement initiatives, macroeconomic risks, and challenges associated with acquisitions and expansion.