Sasseur Real Estate Investment Trust · SGX:CRPU
Sasseur Real Estate Investment Trust — CLSA Group Call Investor Presentation (May 2021)
46 slides from Sasseur Real Estate Investment Trust's conference presentation, May 18, 2021
Slide 1: SASSEUR REIT – Growth in a Sunrise Industry
SASSEUR REIT – Growth in a Sunrise Industry First Listed Outlet Mall REIT in Asia CLSA Group Call Investor Presentation 18 May 2021
Slide 2: Disclaimer
Disclaimer Not for release, publication or distribution in or into the United States, Canada, Japan or the People’s Republic of China. This presentation shall be read in conjunction with Sasseur REIT’s financial results announcement dated 12 May 2021 published on SGX Net. This presentation is for in
Slide 3: Content
Content Section 1 Key Investment Highlights Section 2 Overview of PRC’s Outlet Market Section 3 About Sasseur REIT Section 4 About Sasseur Group Section 5 Entrusted Management Agreement (“EMA”) Model Section 6 1Q 2021 Financial Results Section 7 Capital Management Section 8 Portfolio Update Section
Slide 4: Key Investment Highlights
Key Investment Highlights Retail Outlet – A Sunrise Industry Sasseur - Leading Outlet Operator Fast-growing retail outlet sector projected to become world’s Leading privately-owned outlet mall largest by 20301 operator Growing middle-class population Deep understanding of local retail & spending pow
Slide 5: Growth of PRC Outlet Market
Growth of PRC Outlet Market Between 2015 to 2019, the number of outlets which surpassed RMB >1 billion sales had more than doubled 16 34 outlets outlets Total Sales Total Sales RMB >30 Billion RMB >70 Billion Year 2015 Year 2019 Source: Outletscn 奥特莱斯网 5
Slide 6: Projected Growth of PRC Outlet Market
Projected Growth of PRC Outlet Market Large Supply Gap Presenting Young Industry with Room Retail Market Growth Projection Upside Opportunity for Further Growth China Retail Sales China’s Outlet Industry China’s Outlet Industry (RMB billion) (RMB billion) (RMB billion) Supply US$96.2 US$91.5 gap 145
Slide 7: PRC’s Outlet Fundamentals Remain Attractive
PRC’s Outlet Fundamentals Remain Attractive Fast Growing Middle High Demand for Rising Affluence Class Population Luxury Brands ~850M Annual Spending ~500M 12.1% US$111 CAGR Billion Projected to grow 2018 2030 Chinese consumers 12.1% annually from Chinese population purchase more than a 2015 to reac
Slide 8: About Sasseur REIT
About Sasseur REIT First Outlet Mall REIT listed in Asia 8
Slide 9: Sasseur REIT Structure
Sasseur REIT Structure Chairman Xu L Catterton Asia Ping An Real Estate Sasseur Cayman 100.0% Public Cayman HoldCo 57.84% 42.16% REIT Manager Sasseur Trustee REIT 100% 100.0% SG HoldCo Bishan Offshore Hefei Offshore Kunming Offshore Offshore HoldCos HoldCos HoldCos 100.0% 100.0% 100.0% Onshore Entru
Slide 10: About Sasseur Group – Strong Sponsor
About Sasseur Group – Strong Sponsor Introduction to Sasseur Group Changchun ▪ Founded in 1989, Sasseur is one of the leading premium outlet groups in the People’s Republic of China (“PRC”), that focuses on the development and operation of retail outlet Lanzhou malls in the PRC Yangzhou Xi’an Nanjin
Slide 11: About Sasseur Group – Strong Sponsor
About Sasseur Group – Strong Sponsor Highly Recognised Enterprise One of the Leading Operators in China’s Outlet Industry ▪ 2020 China Top 10 Influential Commercial Enterprise ▪ 13 Outlets Under Management, 5 More in the Pipeline Award ▪ Among the outlets in operation, 5 outlets achieve sales ▪ 2020
Slide 12: Sponsor’s Unique “Super Outlet” Business Model
Sponsor’s Unique “Super Outlet” Business Model “1” represents the outlet mall business platform and “N” reflects the various lifestyle options offered in each of the outlet malls Unique lifestyle experience based on a combination of art in the design and decoration of its outlet malls, and as a one-
Slide 13: Sponsor’s Unique “Super Outlet” Business Model
Sponsor’s Unique “Super Outlet” Business Model Integrated destination shopping combining “1+N” business model in the design 1 and operation of Sasseur REIT’s outlet malls Enhances resilience to competition from online retail platforms by providing a 2 unique lifestyle shopping experience 3 Robust an
Slide 14: Sasseur – Leading Private Outlet Specialist in PRC
Sasseur – Leading Private Outlet Specialist in PRC Leading private outlet specialist in PRC Benefits of being a private outlet specialist Applicable Outlet Operator Different Types of Outlet Operators in China Not applicable Outlets Operators category Operational Brand Understanding Financial Experi
Slide 15: Outlet’s Competitive Edge Against Other Retail Models
Outlet’s Competitive Edge Against Other Retail Models Outlets Department Store Shopping Mall Online Platform Luxury and high-end Product Mix Middle to high-end brands Middle to high-end brands Low priced products brands Pricing Strategy Large Discounts Normal Normal Low Consumer Experience ✓ (sm
Slide 16: Entrusted Management Agreement (EMA) Model
Entrusted Management Agreement (EMA) Model SASSEUR SASSEUR(KUNMING) OUTLETS (BISHAN) OUTLETS
Slide 17: Entrusted Management Agreement Model
Entrusted Management Agreement Model Business Model REIT Income Model Outlet Sales Gross Revenue EMA Resultant Rent EM Base Fee Residual Outlets Variable Component (% of Sales) Chongqing 4.0% FC Bishan 4.5% ~10-16% Hefei 5.5% Commission Kunming 5.0% VC EM Performance Fee ▪ GR = Total rental receivab
Slide 18: 1Q 2021 Financial Results
1Q 2021 Financial Results SASSEUR (KUNMING) OUTLETS
Slide 19: 1Q 2021 Key Highlights
1Q 2021 Key Highlights Sasseur REIT share price has recovered 70% from a low of $0.525 in April 2020 to $0.890 in March 2021 1Q 2021 1Q 2020 Y-o-Y1 EMA Rental Income2 Sales Occupancy RMB 1,136.6 S$32.3 million S$25.3 million 27.8% 93.5% million Distributable Income S$23.6 million S$16.0 million 47.8
Slide 20: Financial Results
Financial Results SASSEUR (CHONGQING LIANGJIANG) OUTLETS 20
Slide 21: 1Q 2021 DPU Increased 31.9% vs 1Q 2020
1Q 2021 DPU Increased 31.9% vs 1Q 2020 Change Change 1Q 2021 4Q 2020 1Q 2020 % % Fixed Component 105.5 102.4 +3.0 102.4 +3.0 (RMB mil) Variable Component 51.9 56.7 -8.5 24.8 +109.4 (RMB mil) EMA Rental Income1 157.4 159.1 -1.1 127.2 +23.7 (RMB mil) EMA Rental Income1, 2 32.3 32.3 +0.1 25.3 +27.8 (S$
Slide 22: Healthy Balance Sheet
Healthy Balance Sheet S$ mil 31 Dec 2020 31 Mar 2021 Investment properties 1,651.1 1,670.5 Cash and short-term deposits 155.9 154.2 Other assets 51.2 33.7 Total Assets 1,858.2 1,858.4 Loans and borrowings 504.3 499.5 Other liabilities 248.5 241.1 Total Liabilities 752.8 740.6 Net Assets 1,105.4 1,11
Slide 23: Distribution Details
Distribution Details Distribution Period 1 1 January to 31 March 2021 Distribution Per Unit1 1.759 Singapore cents 1. Based on 90% distribution pay-out ratio Distribution Timetable Notice of Books Closure Date 12 May 2021 Ex-dividend Date 10 June 2021 Books Closure Date 11 June 2021 Distribution Pay
Slide 24: Sasseur REIT Yield vs Other Asset Classes
Sasseur REIT Yield vs Other Asset Classes 1 Sasseur REIT Distribution Yield 8.0% 2 Average of the 43 S-REITs and Property Trust 5.8% 2 STI Index 3.3% CPF Ordinary Account Interest Rate 2.5% MAS Benchmark Govt Bond 10 Year 3 1.7% 4 Singapore Fixed Deposit Rate 0.2% Notes: 1. Distribution yield based
Slide 25: Capital Management
Capital Management SASSEUR (HEFEI) OUTLETS 25
Slide 26: Prudent Capital Management
Prudent Capital Management Aggregate leverage at 27.6% provides debt headroom for acquisition Average Interest Weighted Aggregate Debt Coverage Average Cost Leverage of Debt Maturity Ratio 31 Mar 2021 31 Mar 2021 1Q 2021 1Q 2021 27.6% 2.0 years 7.5 times 3.3% p.a. 31 Dec 2020 31 Dec 2020 1Q 2020 1Q
Slide 27: Prudent Capital Management
Prudent Capital Management Debt Facilities (SGD million) Debt Headroom1 Debt Headroom1 823 834 Offshore Debts2 Offshore Debts2 Aggregate 247 Aggregate 241 Leverage Leverage 27.9% 27.6% Onshore Debts2 Onshore Debts2 271 271 31 December 2020 31 March 2021 50% Limit3 50% Limit3 1. Debt headroom is comp
Slide 28: Debt Maturity Profile
Debt Maturity Profile Weighted average debt maturity is 2.0 years S$ million Debt Maturity 503 3 6 2021 2022 2023 28
Slide 29: Portfolio Update
Portfolio Update SASSEUR (HEFEI) OUTLETS
Slide 30: Portfolio Summary
Portfolio Summary Portfolio Valuation* : 8,142 mil NLA : 312,844 sqm Occupancy ^ : 93.5% Hefei Outlets *Based on independent valuation as at 31 Dec 20 by JLL (RMB million). Valuation : 2,758 mil ^Occupancy for 1Q 2021 NLA : 144,583 sqm Occupancy : 95.2% Chongqing Liangjiang Chongqing Bishan Kunming
Slide 31: 1Q 2021 Outlet Sales Summary
1Q 2021 Outlet Sales Summary Outlet sales are 112.6% higher than 1Q 2020 but 5.8% lower than 1Q 2019 1Q 2021 1Q 2021 vs 1Q 2021 vs 1Q 2021 vs Outlets Sales 1Q 2020 1Q 2019 4Q 2020 (RMB’mil) (%) (%) (%) Chongqing Liangjiang 560.5 +141.1 -8.0 -11.1 Chongqing Bishan 111.3 +114.6 -10.8 -15.5 Hefei 244.2
Slide 32: Portfolio Occupancy
Portfolio Occupancy 4 Outlets enjoy stable occupancy 100.0% 100.0% 94.9% 95.2% 95.8% 96.1% 93.5% 93.5% 81.4% 81.0% 4Q20 1Q21 4Q20 1Q21 4Q20 1Q21 4Q20 1Q21 4Q20 1Q21 重庆两江 重庆璧山 合肥 昆明 项目组合 Chongqing Liangjiang Chongqing Bishan Hefei Kunming Portfolio 32
Slide 33: Weighted Average Lease Expiry (WALE)
Weighted Average Lease Expiry (WALE) Deliberate short lease to optimise tenant mix Lease Expiry by NLA & Gross Revenue WALE by : 80.0% NLA 2.6 years 69.2% 70.0% Gross Revenue 1.0 years 60.0% 50.8% 50.0% 40.0% 30.0% 26.1% 20.0% 16.5% 15.5% 10.0% 6.6% 7.1% 8.2% 0.0% 2021 2022 2023 2024 & Beyond by NLA
Slide 34: VIP Members - Growth by Outlets
VIP Members - Growth by Outlets Total VIP members increased 6.8% in 1Q 2021 to reach 2.25 million Members in ‘000 2500 2,252 2,108 2000 1500 1000 737 681 483 500 351 0 Chongqing Liangjiang Chongqing Bishan Hefei Kunming Total 2017 2018 2019 2020 1Q2021 34
Slide 35: Well Diversified Trade Mix
Well Diversified Trade Mix Breakdown of NLA1 by Trade Sector Breakdown of Revenue2 by Trade Sector Lifestyle & Accessories 1.8% Kids-centric Centres Anchor Tenants 0.9% Ad-hoc Outlets Entertainment 3.5% Lifestyle & Entertainment 1.2% 1.2% 0.5% Ad-hoc Outlets 0.7% Children 4.1% Accessories 2.4% Shoe
Slide 36: Exciting Promotional Activities to draw Shoppers
Exciting Promotional Activities to draw Shoppers 36
Slide 37: Chongqing Liangjiang Outlets
Chongqing Liangjiang Outlets Sales RMB 'Mil Chongqing 750 673 609 630 561 580 593 600 480 450 396 300 233 150 - 1Q 2Q 3Q 4Q 2017 2018 2019 2020 2021 Year Commenced Operations Sep 2008 Outlet Members GFA (sqm) 73,373 (‘000) 800 737 NLA (sqm) 50,885 671 66 635 650 586 36 49 Occupancy Rate (%, 31 Mar 2
Slide 38: Chongqing Bishan Outlets
Chongqing Bishan Outlets Sales RMB 'Mil Bishan 150 125 127 132 111 114 106 100 93 79 52 50 - 1Q 2Q 3Q 4Q 2017 2018 2019 2020 2021 Year Commenced Operations Oct 2014 Outlet Members GFA (sqm) 68,791 (‘000) 351 350 326 NLA (sqm) 47,308 301 26 284 25 256 263 17 231 21 Occupancy Rate (%, 31 Mar 21) 250 2
Slide 39: Hefei Outlets
Hefei Outlets Sales RMB 'Mil Hefei 400 338 286 300 273 276 243 244 218 223 200 128 100 - 1Q 2Q 3Q 4Q 2017 2018 2019 2020 2021 Year Commenced Operations May 2016 Outlet Members GFA (sqm) 147,316 (‘000) 750 681 646 NLA (sqm) 144,583 650 35 573 72 522 550 478 52 Occupancy Rate (%, 31 Mar 21) 95.2 440 4
Slide 40: Kunming Outlets
Kunming Outlets Sales RMB 'Mil Kunming 250 238 237 229 221 208 200 180 188 143 150 122 100 50 - 1Q 2Q 3Q 4Q 2017 2018 2019 2020 2021 Year Commenced Operations Dec 2016 Outlet Members GFA (sqm) 88,257 (‘000) 550 466 483 NLA (sqm) 70,067 446 17 450 417 20 390 29 374 27 16 Occupancy Rate (%, 31 Mar 21)
Slide 41: Potential Pipelines
Potential Pipelines • All acquisitions must be yield accretive • Reduce concentration risk, explore other parts of the World Changchun • 7 out of 12 Pipeline Properties are in operation Shijiazhuang ROFR Properties Lanzhou Xi’an Nanjing & Yangzhou Shanghai Nanjing II Suzhou Xi’an Guiyang Changsha Ha
Slide 42: Investment Merits
Investment Merits 42 SASSEUR (KUNMING) OUTLETS
Slide 43: Key Milestone and Awards
Key Milestone and Awards FTSE EPRA NAREIT Global Emerging Market Index Inclusion1 1 2 3 Most Promising REIT in Best Retail REIT (Platinum) Best REIT Deal in Asia Best CEO (Platinum) Southeast Asia 2018 By: Fortune Times REITs Pinnacle Best Investor Relations (Gold) By: Alpha Southeast Asia 12th Annu
Slide 44: Investment Merits
Investment Merits Market Leadership: Sasseur Group is one of the largest outlet operator in 1 China, with 13 outlets and over 13 years of operating experience Unique Art-Commerce Busines model : Full alignment of interests of tenants, 2 REIT unitholders, the REIT and entrusted managers, with the pot
Slide 45: Why Sasseur REIT?
Why Sasseur REIT ? EMA Model Strong Growth Potential 13 Outlets Leading Resilient Outlet Retail Operator Segment in China Sasseur Strong REIT Interest Attractive Ongoing AEI Alignment Valuation through EMA 8.0% Yield Leveraging on Strong Model Growth Sponsor Support Potential Chongqing Hefei ✓ 2 ROF
Slide 46: Thank You
Thank You For enquiries, please contact: Ms Wong Siew Lu, CFA, CA (Singapore) Head, Investor Relations and Corporate Affairs Email: wongsl@sasseurreit.com Tel: +65 6360 0290 Address: 7 Temasek Boulevard, #06-05, Suntec Tower One, Singapore 038987
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