Is Sasseur REIT A Good Buy In 2026? [Fundamental Analysis]

Daniel Lee
22 hours ago
3 min read

In this article, we'll conduct a fundamental analysis and review of Sasseur REIT and its suitability to achieve the following investment objective: To deliver a stable dividend yield of 5% to 6% per year while having high capital preservation ability.

Business Description

Sasseur REIT is an industrial REIT that was listed in 2018 and owns 4 outlet malls in mainland China.

What I Like About Sasseur:

Stable operating performances and DPU track record since their listing.
Till 2028, the majority of the rental income is fixed under the Master Entrusted Management Agreement with a 3% annual escalation rate
The REIT has one of the healthiest balance sheets
Sponsors have a very good track record in managing the outlet malls and growing the sales of their tenants

What I Do Not Like About Sasseur:

The underlying land leases are very short (Figure 10). This opens investors up to the issue of lease decay.
RMB exposure, while inevitable, might result in higher volatility in DPU performances as a result of foreign exchange volatility.

Updates From Recent Performance (FY 2025)

General Comments:

EMA rental income is 0.2% lower due to the weakening RMB against SGD. On a local currency basis, EMA increased by 2.9% y.o.y.
DPU from operations have improved by 3.19% due to lower borrowing cost which saw a decrease of 4.54% as a result of lower onshore interest rate and lower loan balances.
Portfolio valuation (in RMB) saw a drop of 0.7% due to assumptions of moderated tenant’s sales growth adopted by independent valuer in views of China’s macroeconomic uncertainties.
Management has refinanced their SGD and USD-denominated offshare debt with RMB borrowings. Currently, 100% of their borrowings are denominated in RMB, eliminating the FX impact on their borrowings.
100% of their borrowings are variable and pegged to China’s 5 Yr LPR.
Shopper traffic is increased by 3.2million to 17million. Total portfolio sales experienced a 2.6% year over year increase.
Sassuer Group (Sponsor) have 22 outlet projects with 19 in operation.

Positive Headwinds:

As China’s retail market undergoes a structural recalibration, outlet malls are in a very good position to capture consumers who are value-conscious, selective and experience-driven.

Negative Headwinds:

Ongoing regional conflict in the Middle East coupled with rising global uncertainty may result in further tightening of consumer wallets which may result in lower sales for Sassuer REIT’s properties. In 2025, we’ve seen this in the disproportionate increase between shopper traffic and sales.

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