Sassuer REIT - DBS Research 2020-04-14: Pent-up Demand Seen

SASSEUR REIT (SGX:CRPU)

Sassuer REIT - Pent-up Demand Seen

All malls reopened to an encouraging 129% hike in tenant sales.
Revised target price implies 0.9x P/BV and a current FY20F dividend yield of 10%.
Prolonged sales demand an upside to our current conservative sales estimates.

All four of Sasseur REIT (SGX:CRPU)’s outlet malls are now in full operations following temporary closure due to COVID-19. As life approaches normalcy in China, we see pent-up demand within the consumer discretionary space where Sasseur REIT’s outlet malls stand to benefit.
Our revised Target Price accounts for a y-o-y dip in tenant sales following a portfolio-wide mall closure of approximately two months.
Sasseur REIT current trades at an attractive FY20F dividend yield of 10%. Our new target price of S$0.80 presumes that the REIT will trend up and trade closer to book at a target P/BV of 0.9x

All four outlet malls in Sasseur REIT’s portfolio reopened between 11 and 15 March, following a temporary closure towards the end of January. As part of the tenant support measures, Sasseur Group will be waiving property management fees and all other fees during the period of mall closure.
Reopening sales had since been launched at all outlet malls and saw encouraging first day sales that were 129% higher than that achieved during the corresponding dates last year on a blended basis.

We revised out top-line rental revenue in conjunction with a 15% dip in tenant sales for FY20 (as opposed to a previous growth forecast of 5-15%) to account for an approximate two-month temporary closure period.
Prolonged interest during the reopening sales across all the outlet malls in anticipation of pent-up demand will act as a second catalyst to our conservative estimates.

Singapore Research DBS Group Research | Derek TAN DBS Research | https://www.dbsvickers.com/ 2020-04-14

SGX Stock Analyst Report BUY MAINTAIN BUY 0.80 DOWN 0.930