Unaudited Financial Statements Announcement For the Third Quarter Ended 30 September 2019

Financials Archive

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Profit & Loss

Balance Sheet

Review of Performance

Total outlet sales of RMB 1,218.4 million for 3Q 2019 was RMB 105.0 million or 9.4% higher than that of 3Q 2018. The outlets held successful two-week long major sales promotions in September 2019 for the anniversary celebrations. The combined first-day sales of all four outlets surpassed last year’s sales record by 8.9%.

In line with the growth in outlet sales, EMA rental income (excluding straight-line rental accounting adjustment) for 3Q 2019 was RMB 10.0 million or 6.9% higher as compared to 3Q 2018.

Overall, the total return available for distribution to Unitholders of S$19.6 million for 3Q 2019 was an increase of 7.6% from the same period last year, largely due to the transfer to statutory reserve required in the comparative period that is no longer needed in the current period.


China’s gross domestic product (GDP) was RMB 63,847.7 billion from January to September of 2019, a year-on-year increase of 6.2%[1] at constant prices. The third quarter GDP growth in China for 2019 was 6.0%, slightly lower than 6.2% in the second quarter and mainly attributed to the effects of the trade war with the U.S. Nevertheless, in the first three quarters of 2019, total retail sales of consumer goods reached RMB 29,667.4 billion, an increase of 8.2% year-on-year. In September 2019, the total retail sales of consumer goods reached RMB 3,449.5 billion, up by 7.8% year-on-year.

Though the Chinese economy expanded at its slowest rate in nearly three decades for the third quarter, mainly due to cooling domestic demand and a protracted U.S. trade tension, the central government is countering the slow down with measures such as major tax and rate cuts and scrapping of foreign investment restrictions in its stock market[2].

To mitigate the impact of foreign currency fluctuations, Sasseur REIT has hedged more than half of its 3Q 2019 distributable income and the REIT Manager will closely monitor the RMB:SGD exchange rate trend.

Chongqing Market Update

An estimated retail gross floor area (GFA) of around 780,000 sqm will enter the Chongqing market in 2019[3].Chongqing Raffles City Shopping Centre opened on 6 September 2019 in Yuzhong District with an NLA of 235,000 sqm. Capital Outlet opened on 28 September 2019 in Banan District with an estimated NLA of 51,000 sqm and located about 30km away from our Outlet. These two malls added approximately 286,000 sqm of new supply to the market. As more projects enter the Chongqing retail market, we will monitor the increase in competition closely. In view of this, Sasseur’s outlets in Chongqing has initiated proactive brands renewals that is also in line with the fast changing consumers’ taste in the market.

Hefei Market Update

For third quarter of 2019, no new outlet malls were opened in Heifei, and Sasseur’s Hefei Outlet remains on track for sustained growth.

Kunming Market Update

Outlets Town, operated by retail merchandiser WangFuJing Group, opened for business on 28 September 2019. The GFA is around 128,000 sqm, located on the southern part of Kunming city and about 23km away from our Sasseur Outlet. We will closely monitor the performance of this outlet. We expect the performance of our outlet to continue to do well as it is positioned to serve the middle class and offers a wider range of brands and retail options in line with their needs and preferences.

Barring any unforeseen circumstances, retail sales for Sasseur’s four outlet malls are expected to continue growing well through 2019. Regardless of the negotiations between China and the U.S. as they try to resolve their trade tension, our outlet sales in China remain resilient and are largely unaffected, as our outlets are focused on the domestic market in China, catering mainly to the large pool of middle class consumers.

1 National Bureau of Statistics of China

2 Business Times dated 16 Oct 2019

3 Savills Research Report