|Dasin Retail Trust (DRT) announced a distribution of 1.92 Singapore cents for 1H2020.
On on an annualised basis, and a recent traded price of 78 cents, DRT’s distribution yield is 4.92%.
The books closure date was 6 July 2020 and the 1H2020 DPU of 1.92 cents is expected to be paid on 28 Sept 2020.
Revenue for 1H2020 was higher than 1H2019 by approximately S$1.8 million mainly due to the contribution from Doumen Metro Mall which was acquired in September 2019.
This was partially offset by lower rental income from its other four malls arising from the impact of COVID-19 as well as rental rebates provided to the tenants.
During the 1H2020 period, the Trustee-Manager helped to drive tenant sales and mitigate the decline in shopper traffic through “Dasin Hui” (大信荟) WeChat Mini Program which connects to more than 650,000 members.
From March to June 2020, DRT organised live broadcasts hosted by online influencers to promote a wide variety items available at the malls.
Coupled with an easing in lockdown measures, monthly turnover rent recovered to 90.4% of 4Q2019 average in June 2020, from 36.1% of 4Q2019 average in February 2020.
DRT’s portfolio ended 1H2020 with a stable occupancy rate of 97.0%.
Its weighted lease to expiry of 4.0 years (by gross rental income) and 6.5 years (by net lettable area).
NPI margin for 1H2020 was approximately 81.6% (1H2019: 80.7%).
The NPI margin improved mainly due to lower operating expenses resulted from lower electricity charges and property tax as well as property tax rebates provided by the local government.
Despite the current uncertainties, the underlying value of DRT’s assets is supported by growing demand for properties in the Greater Bay Area.
The Chinese government has recently eased home ownership and employment rules for Hong Kong residents in the Greater Bay Area, and this is expected to spur economic activity and property demand.
Furthermore, new exchanges taking shape in Guangzhou (for carbon emission futures trading) and Macau (NASDAQ-like market that helps start-ups) could transform the area into Asia’s largest financial market.
According to an article on the South China Morning Post , the population for Greater Bay Area is forecast to grow by 43% over the next 15 years to around 100 million.
The continued growth in population and income levels provides a strong foundation to support property prices in the longer term.
Mr. Zhang Zhencheng, Chairman of the Trustee-Manager of DRT, said, “We have completed the acquisition of Shunde Metro Mall and Tanbei Metro Mall for an agreed property value of S$375 million. This would further strengthen foothold in the fast-developing GBA and improve the performance of the portfolio.
"With this, the valuation of the portfolio has been expanded by nearly three times to about RMB11.7 billion from RMB4.6 billion within three years from listing.”
Ms. Wang Qiu, CEO of the Trustee-Manager of DRT, said, “The successful acquisition of Shunde Metro Mall and Tanbei Metro Mall is a testament to the ability of the Trustee Manager in executing the growth strategy to strengthen its presence in the Greater Bay Area as well as enhance its returns to the Unitholders. We will continue to undertake a prudent and disciplined investment approach to inject quality properties to enhance the performance of Dasin Retail Trust’s portfolio.”