Major cities in China have started re-opening and easing measures as the number of infections across China dropped.

The city of Shanghai finally re-opened on Jun 1 while some districts of Beijing are allowed to return to work.

Businesses are hopeful that the easing of measures will be a step towards gradual normalisation and have a positive impact on operations.

There are 5 S-Reits and property trusts with pure exposure to China assets.

Sasseur Reit, BHG Retail Reit and Dasin Retail Trust, which is a property trust, are retail Reits while EC World Reit  is an industrial Reit and CapitaLand China Trust is a diversified Reit.

CapitaLand China Trust (CLCT) reported 24 per cent year-on-year growth in gross revenue for Q1 2022, which in turn contributed to the 30.4 per cent growth in net property income (NPI).

CLCT noted that, for its retail portfolio, January to February shopper traffic and sales increased year on year until the recent Covid-19 wave in March.

All business parks remained open during the quarter and operations were not impacted.

However, in line with Shanghai lockdown measures, activities at the Shanghai Fengxian and Kunshan Bacheng Logistics Parks have paused.

The trust expects its logistics portfolio to be largely resilient.

Sasseur Reit reported distributable income of S$24.7 million, a 4.7 per cent increase year on year but 2.4 per cent drop quarter on quarter.

Its Q1 2022 outlet sales of 1,096.2 million yuan was 3.6 per cent lower year on year as a result of weaker buying sentiments and shopper traffic after the latest wave of Covid-19.

However, the Reit noted that there were no known outbreaks of Covid-19 in the cities where its 4 outlets are located.

EC World Reit (ECW) reported a 7.4 per cent year-on-year growth in NPI for Q1 FY2022.

However, distribution to unitholders dipped 9.4 per cent, mainly impacted by withholding tax expense incurred for repatriation of funds and provision for pre-termination compensation to a third-party tenant at Fu Zhuo Industrial as a result of compulsory expropriation.

The Reit noted that even though recent Covid-19 lockdowns in China caused bottlenecks in global supply chains, ECW’s portfolio of properties has not been materially impacted by the recent lockdowns.

BHG Retail Reit has 6 properties across 5 cities in China - Xining, Chengdu, Hefei, Dalian and Beijing.

Notwithstanding the near-term uncertainties and headwinds from Covid-19, the Reit noted that it remains focused to proactively manage and enhance existing assets, as well as to pursue acquisition opportunities.

As at Mar 31, 2022, close to 80 per cent of the Reit’s net lettable area is leased to tenants in experiential trade sectors.

Dasin Retail Trust announced in March 2022 that the trust had entered into a non-binding memorandum of understanding (MOU) to explore the sale of two assets - Shiqi Metro Mall and Xiaolan Metro Mall.

While the new waves of Covid-19 cases and the country’s pandemic prevention and control policies have moderated the pace of recovery of consumer consumption, the trust noted that it will continue to look into ways to realise organic growth, through improving tenant mix, introducing trending brands, or undertaking asset enhancement initiatives (AEIs).

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