SINGAPORE (Apr 24): Top management at Sasseur REIT, which owns a portfolio of malls in China, have gone on a shopping spree of their own now that their malls have reopened.
Yang Xue, wife of Xu Rongcan, Sasseur REIT’s controlling shareholder and chairman who is also known as Vito Xu, bought some 12 million units in just over a month. Yang herself is a non-independent, non-executive director at the REIT.
Most recently, Yang acquired 4.3 million units on April 16 from an unnamed party for $3.01 million in total in an off-market deal. With that purchase, Yang now has a direct stake of just over 11.1 million units. However, through entities controlled by her husband Xu, she is deemed to have interest in another 690.8 million units. This gives Xu a total stake of nearly 701.8 million units, or 58.56%.
In another married deal on April 15, Yang paid $490,0000 for 700,000 units. This works out to be 70 cents per share. On March 30, again via a married deal, Yang paid $3.4 million for 5.67 million units, which works out to be 60 cents per unit. Earlier on March 16, she had bought 465,000 units on the open market for $304,575 as well.
Besides Yang, Anthony Ang, CEO of the REIT manager, Sasseur Asset Management, has been scooping up units too. On March 13, he bought 100,000 units from the open market at 64 cents each. On March 19, he bought another 20,000 units at 54 cents. This brings his total stake to 420,000 units. In addition, Ang’s wife, on March 18, bought 30,000 units for an undisclosed sum, bringing her stake to 80,000 units. This means Ang has a total stake of 500,000 units.
Sasseur REIT owns a portfolio of four outlet malls in China. When Covid-19 spread like wildfire across China at the start of the year, malls — along with most other business activities in the country — were ordered to shut down in late January to curb the spread of the disease.
However, given that the outbreak in China has been brought under control, malls were allowed to reopen progressively. On March 11, Sasseur’s mall at Kunming was allowed to resume business. On March 13, local authorities allowed Sasseur’s Hefei outlet mall to reopen. Two days later, its Chongqing and Bishan outlet malls were given the go-ahead to reopen too. With that, Sasseur REIT has resumed full operations.
Sasseur REIT is structured in such a way that its income consists of a variable component, which is dependent on actual sales, and a fixed component, which is provided by its sponsor. The latter forms the bulk of Sasseur REIT’s distributable income, and forms a stable income base where returns for unitholders can be derived.
During the two-month closure, Sasseur REIT continued to receive this fixed component. “The manager is of the view that the financial impact to Sasseur REIT should not be material for the full year due to the relatively short closure period of approximately seven weeks,” said Ang in a filing on March 13.
On March 17, Sasseur Asset Management reported that first-day reopening sales from the four malls were on average 129% higher than the relevant corresponding dates in 2019. “The epidemic has triggered a global economic downturn and consumers are pursuing the most value-for-money products. On the other hand, traditional retail consumption has been hit hard and apparel inventory has surged,” says Xu.
“We are very optimistic and confident in China and the Chinese outlet industry. We look forward to continued strong development and growth of the Sasseur outlet business,” he adds.
Given the Covid-19 situation has “greatly improved”, Ang says shoppers have returned and that it is “business as usual” for its malls. Still, he cautions that due to the closure, sales for 1QFY2020 ended March, would also be hurt. Even then, Sasseur REIT’s sponsor will ensure that the REIT continues to receive the fixed income component.
“Meanwhile, we will redouble efforts to increase foot traffic and to enhance unitholders’ value while ensuring the health and well-being of employees and customers,” he adds.
