Financial Information

Unaudited Financial Statements Announcement For the Third Quarter Ended 30 September 2018

Financials Archive

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Profit & Loss

Balance Sheet

Review of Performance

Total outlet sales for YTD 2018 was S$416.1 million, 7.5% higher than forecast for the same period. The outlet sales were better than forecast mainly due to the successful anniversary celebrations in September across all four outlet malls with record breaking sales achieved on a single day. Portfolio occupancy rate was 94.4% as at 30 September 2018.

Total income available for distribution was S$36.9 million for YTD 2018 which was S$1.6 million or 4.5% above forecast. Distribution per unit was 3.130 Singapore cents and annualised distribution yield was 7.6% based on IPO listing price of S$0.80.

Total gross borrowings was S$510.7 million, comprising S$385.7 million (RMB 1.94 billion) onshore loans to the PRC Property Companies and S$125.0 million offshore loan to Sasseur REIT. The aggregate leverage was 32.5% and overall weighted average cost of borrowings for YTD 2018 was 5.4%, with an interest cover of 3.0 times.

The net current assets as at 30 September 2018 was S$46.8 million, representing a healthy current ratio of 1.3 times.


The 2nd quarter GDP growth for 2018 was 6.7%1. This is slightly slower than the 6.8% gain in the first quarter. This is the weakest pace of GDP growth in China since the 3rd quarter of 2016, and is mainly attributed to the trade war with the US, but it is still on track to meet or exceed the full year GDP growth forecast of 6.6%2 for 2018.

For 2019, the forecast for GDP growth is 6.3%3. Urban household per capita disposable income grew 7.9%4 for the 2nd quarter of 2018 on a Year-on-Year (YoY) basis compared to the same period in 2017. Based on data from the China’s National Bureau of Statistics, total retail sales of consumer goods continue to grow strongly in July and August 2018 to reach RMB 3,073 billion and RMB 3,154 billion, up by 9.3% and 9.0% YoY nominal growth rate respectively.

Chongqing Market Update

In term of competition, 0.3 million sqm of traditional retail space was added to Chongqing’s stock of 5.7 million sqm. International brands such as Marie Eile, Hip and Bone, Denham, Max Mara, Pinko, etc had also increased their presence. To meet the challenges ahead, our Entrusted Manager would link up with new brands entering the Chongqing market to attract them to our outlet stores and fine-tune our tenants’ mix to accommodate changing consumer tastes.

Hefei Market Update

In Hefei, Capital Outlet (首创奥莱) recently opened for business on 22 September 2018. It has about 80,000 sqm of space located around 23km which is some distance away from Sasseur Hefei Outlet and is not expected to affect business at the Hefei Outlet.

Kunming Market Update

In Kunming, there is around 3.7 million sqm shopping mall space in the city centre. In the city centre, there is a small 30,000 sqm outlet mall which is more an ordinary shopping mall. There is also a “departmental outlet” (百货奥特莱斯) in Kunming, ran by a department store operator that has a hybrid departmental cum discounted store positioning whereby many products are sold at full price or with relatively unattractive discounts. The mall also has many education services tenants.

Overall, total sales for Sasseur REIT’s portfolio of outlet malls in China had performed better than their seasonality-adjusted budgets for the quarter (i.e. for the period from July to end September). At the same time, the supply of outlets continues to grow to meet the demand from the expanding Chinese middle class.

Despite the trade war, the strong growth potential of outlets industry in China is unaffected as the domestic consumption by the middle class in China remained robust and resilient, with the Chinese government also promoting domestic consumption to sustain economic growth. This is favorable for Sasseur REIT as its EMA income comprises of a fixed component that is stepped up annually and a variable component that is pegged to sales generated by its tenants at the respective outlet malls. Sasseur’s double destination shopping positioning: Outlets’ value-for-money discounted positioning and Sasseur’s lifestyle & experiential “Super Outlet 1+N” positioning will further strengthen our outlets and drive our growth ahead.

1 Bloomberg News 16 July 2018

2 Bloomberg News 22 August 2018

3 Bloomberg News 22 August 2018

4 China’s National Bureau of Statistics