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Sasseur Reit's current EMA agreement is a master lease with variable component, with all operating expenses bore by the master lessee. Back of envelope calculation, this agreement boosts DPU by ~15-20% and expires in March 2028. My guess is that we will probably see a new agreement tabled in early 2027 that may incorporate the REIT sharing some of the operating expenses in exchange for greater rental upside potential (tenant sales). So there is a good chance that the overall immediate net impact on DPU will be negative.
Sasseur Reit eyes South-east Asia for next phase of growth as it looks beyond China
“My hope is that within the next three to five years, we can really internationalise Sasseur Reit – meaning it is no longer just a China-focused outlet platform, but an international one across this region,” CEO of the manager Cheng Hsing Yuen told The Business Times.
Alongside its growth plans, Sasseur Reit is reviewing the EMA framework ahead of its expiry in March 2028 – a process that chief financial officer of the manager Ella Jia described as “the biggest project” for the Reit at the moment. Under the model, an entrusted manager handles the day-to-day operations of its outlet malls, where gross revenue is largely commission-based and linked to tenant sales. Sasseur Reit receives a fixed rental component with a built-in 3 per cent annual increase, as well as a variable component tied to outlet sales, allowing it to participate in any sales upside.
The Reit manager noted that the current EMA was “designed in 2017/2018, when the assets and China’s retail environment were quite different”. “Since then, the retail landscape, consumer behaviour, operating environment and the maturity of the assets have evolved.” The review will take into account factors including growing consumer value-consciousness, changes in operating expenses borne by the entrusted manager and the longer-term performance of the assets. The manager intends to retain the EMA structure, which it said has remained resilient through periods of disruption such as the Covid-19 pandemic.
Separately, Sasseur Group listed its first C-Reit on the Shanghai Stock Exchange this year. Cheng said the C-Reit gives the sponsor access to China’s domestic capital market and investor base, while Sasseur Reit provides access to international capital and a vehicle through which the group can expand beyond China.
“If we have a good project in this part of the world and need capital, we could divest a property, recycle into the C-Reit, take the capital and invest it in this part of the world,” said Cheng. Jia noted, however, that while such a transaction was technically possible, whether it would make strategic sense would depend on broader considerations beyond valuations, including differences in investor bases and market structures. Still, there are no acquisitions in the immediate pipeline and Cheng expects inorganic growth to materialise over the medium term.
https://www.businesstimes.com.sg/compani...yond-china
Sasseur Reit eyes South-east Asia for next phase of growth as it looks beyond China
“My hope is that within the next three to five years, we can really internationalise Sasseur Reit – meaning it is no longer just a China-focused outlet platform, but an international one across this region,” CEO of the manager Cheng Hsing Yuen told The Business Times.
Alongside its growth plans, Sasseur Reit is reviewing the EMA framework ahead of its expiry in March 2028 – a process that chief financial officer of the manager Ella Jia described as “the biggest project” for the Reit at the moment. Under the model, an entrusted manager handles the day-to-day operations of its outlet malls, where gross revenue is largely commission-based and linked to tenant sales. Sasseur Reit receives a fixed rental component with a built-in 3 per cent annual increase, as well as a variable component tied to outlet sales, allowing it to participate in any sales upside.
The Reit manager noted that the current EMA was “designed in 2017/2018, when the assets and China’s retail environment were quite different”. “Since then, the retail landscape, consumer behaviour, operating environment and the maturity of the assets have evolved.” The review will take into account factors including growing consumer value-consciousness, changes in operating expenses borne by the entrusted manager and the longer-term performance of the assets. The manager intends to retain the EMA structure, which it said has remained resilient through periods of disruption such as the Covid-19 pandemic.
Separately, Sasseur Group listed its first C-Reit on the Shanghai Stock Exchange this year. Cheng said the C-Reit gives the sponsor access to China’s domestic capital market and investor base, while Sasseur Reit provides access to international capital and a vehicle through which the group can expand beyond China.
“If we have a good project in this part of the world and need capital, we could divest a property, recycle into the C-Reit, take the capital and invest it in this part of the world,” said Cheng. Jia noted, however, that while such a transaction was technically possible, whether it would make strategic sense would depend on broader considerations beyond valuations, including differences in investor bases and market structures. Still, there are no acquisitions in the immediate pipeline and Cheng expects inorganic growth to materialise over the medium term.
https://www.businesstimes.com.sg/compani...yond-china
I am not a certified financial advisor and so nothing of what I say should be construed as financial advice. Please consult a certified financial advisor for advice instead.
