3 Things Dasin Retail Trust’s Management Wants Investors To Know About Its Business

In late February, Dasin Retail Trust (SGX: CEDU) released its 2017 fourth quarter and full year earnings update.

As a quick introduction, Dasin Retail Trust, which listed on January 2017, is the only property trust listed in Singapore’s stock market that has a direct exposure and focus on retail malls in China’s Pearl River Delta region. The trust’s portfolio currently comprises four malls in Zhongshan City of China’s Guangdong province.

 The Manager of the trust had given a presentation on its latest results. In the presentation deck, I saw three slides about its business that I think investors should pay attention to.

The first slide shows a high-level summary of Dasin Retail Trust’s income statement for the fourth quarter of 2017 and the whole year, along with a comparison of the numbers given in the forecast of the trust’s IPO (initial public offering) prospectus:

Source: Dasin Retail Trust’s 2017 fourth quarter earnings presentation

We can see that the trust had performed better than expected in 2017. The trust attributed its forecast-beating results to higher rental income from its portfolio, and the acquisition of Shiqi Metro Mall for RMB1.22 billion in the second half of 2017, which was earlier than initially projected.

The trust also ended 2017 with a committed occupancy rate of 100% for its portfolio.

The next slide I want to look at shows the rental reversion rates of Dasin Retail Trust:

Source: Dasin Retail Trust’s 2017 fourth quarter earnings presentation

We can see that three out of four of Dasin Retail Trust’s properties had seen positive rental reversion rates in 2017. To me, this indicates the strength of the trust’s portfolio.

Going forward, it will be useful for investors to monitor the trust’s rental reversion rates closely, especially with the continued migration of offline retail sales onto online platforms.

The last slide I want to discuss shows Dasin Retail Trust’s lease expiry profile:

Source: Dasin Retail Trust’s 2017 fourth quarter earnings presentation

The trust has a weighted average lease to expiry (by gross rental income) of 3.95 years as of 31 December 2017. 54.6% of the trust’s leases (again, based on rental income) will expire on or before 2020, and the remaining 46.4% of the leases will expire from 2021 onwards.

The staggered lease expiry profile of Dasin Retail Trust reduces pressure on the REIT’s manager, since there’s no huge concentration of lease expiries in any one year to worry about.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.