Unaudited Financial Statements and Distribution Announcement For the Fourth Quarter and Financial Year Ended 31 December 2019

Financials Archive

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Profit & Loss

Balance Sheet

Review of Performance

In RMB terms, total outlet sales for 4Q 2019 increased by RMB 45.2 million or 3.4% from 4Q 2018 mainly due to stronger year-end festive promotion efforts. This led to higher EMA rental income (excluding straight-line adjustment) for 4Q 2019 by RMB 5.7 million or 3.6% compared to 4Q 2018. In SGD terms, EMA rental income (excluding straight-line adjustment) for 4Q 2019 increased by S$0.3 million or 0.9% compared to 4Q 2018. The increase is partially offset by depreciation of RMB against SGD by 2.7%.

Excluding an one-off adjustment to investment properties relating to IPO of S$110.7 million in 4Q 2018, gain on fair value of investment properties for 4Q 2019 was S$15.4 million higher compared to 4Q 2018, echoing good performance by the properties in the long term.

Tax expense for 4Q 2019 was S$24.5 million or 42.1% lower than 4Q 2018, mainly attributable to lower gain on fair value of investment properties, resulting in lower deferred tax.

Total return available for distribution to Unitholders for 4Q 2019 was S$19.5 million as compared to S$23.6 million for 4Q 2018. The decrease was mainly attributable to an one-off adjustment for statutory reserve and utilisation of available tax losses in 4Q 2018. The decrease was partially offset by lower finance costs for 4Q 2019 due to lower interest rate on offshore loan.


China's gross domestic product ("GDP") was RMB 89,164.6 billion from January to December of 2019, a year-on-year increase of 6.1%1 at constant prices. The 6.1% GDP growth met the target range set by the central government, and is significant in the context of the huge Chinese economy. China's per capita GDP has for the first time, exceeded US$10,000 and its GDP has expanded to about RMB 100 trillion (US$ 14.37 trillion) in 2019. Consumption by the growing middle class Chinese remains strong; total retail sales of consumer goods reached RMB 41,164.9 billion, an increase of 8.0% year-on-year. The China-US trade tension may be abating3, with China set to launch a purchasing program that will significantly increase its imports from the US.

The outbreak of the Novel Coronavirus ("COVID-19") in recent weeks is therefore an unexpected setback, and it has impacted various sectors ranging from manufacturing, travel, retail and hospitality, etc.

As announced on 28 January 2020, the Sponsor has temporarily closed the four outlet malls in Sasseur REIT’s portfolio since 26 January 2020 for Chongqing and Bishan, and since 27 January 2020 for Hefei and Kunming. The measures are to safeguard the health and safety of its staff and customers, and to comply with guidelines of the relevant authorities in China. Sasseur REIT will continue to work closely with the local and central governments to coordinate the recommencement of work and quick resumption of business operations when it is deemed suitable to do so.

Due to the timing of the Chinese New Year break (in late January) and mall closures of about three weeks thus far, Management expects that sales for the first quarter of FY 2020 ("1Q 2020") will be affected. However, given that Sasseur REIT’s EMA rental model protects the REIT with a fixed income component, the impact on total distributable income will be mitigated. Sasseur REIT is mindful of the challenges posted by the COVID-19 situation and will continue to monitor the situation closely. Overall, we remain positive on the fundamentals for the outlet business in China.

Chongqing Market Update

For the year ending 2019, an estimated retail gross floor area (GFA) of around 660,000 sqm was added into the Chongqing market. The projected supply for the next five years is estimated at around 4.5 million sqm.

Hefei Market Update

For 4Q 2019, no new outlet malls were opened in Hefei.

Kunming Market Update

A conventional shopping mall, Living mall, which is operated by Kali Hui-Feng real estate group, opened for business on 18 October 2019. The GFA is around 110,000 sqm, located on the southern part of Kunming city and about 33 km away from our Sasseur Outlet. Capital outlet, which is located about 27 km away from our Sasseur outlet, is expected to open for business in the middle of 2020. This outlet is owned and managed by Beijing Capital Group. This outlet’s GFA is around 136,000 sqm with 1,200 car parking lots.

1 National Bureau of Statistics of China

3 BBC News 15 January 2020