Company Update: 6 March 2026
REIT-turn to growth amid improving fundamentals
- Strong DPU recovery. 2H25 distributable income rose 6.5% YoY to S$43.3mn, with 2H DPU increasing 5.3% YoY to 3.083 SG cents. FY25 DPU reached 6.138 SG cents (+0.9% YoY), marking the first full-year DPU growth since FY20. The stronger-than-expected 2H performance was supported by robust promotional momentum, with the portfolio-wide Anniversary Sales campaign generating first-day sales of RMB233.9mn, up over 30% YoY.
2H25 Results
Portfolio outlet sales in 2H25 rose 4.3% YoY to RMB2,417mn, supporting a 3.3% YoY increase in EMA rental income to RMB346.1mn. FY25 distributable income grew 2.8% YoY to S$85.7mn, marking an inflection after several years of DPU decline. The improvement was supported by lower financing costs and steady portfolio sales growth.
Management Fee Update
For FY26, the Manager has increased the cash proportion of its base management fee to 40%, from 30% in FY25, which may modestly reduce distributable income relative to unit-settled fees.
Valuation & Action
We maintain our OUTPERFORM rating with a target price of S$0.87, based on a DDM with an 8.2% cost of equity and 1.5% terminal growth rate. While DPU may soften marginally in the near term due to the higher management fee cash ratio and RMB/SGD translation headwinds. Sasseur REIT’s resilient operating performance, improving financing profile and defensive outlet positioning continue to underpin a stable return outlook. Medium-term upside remains supported by the potential for accretive acquisitions, which could enhance both NAV growth and income diversification.
Risks
EMA expiry, RMB depreciation against SGD, slower-than-expected household spending recovery, and competition arising from online retail and new outlet supply.
