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SG-Retail REITs’ DPU More Than Halved In Q1

By Bianca Cuaresma

Singaporean retail real estate investment trusts’ (REITs) distribution per unit (DPU) fell by about 57% on average in the first three months of the year as firms chose to limit cash outflows and exercise prudence amid the coronavirus disease (Covid-19) pandemic.

Data compiled by REITAsiaPac showed that six out of ten retail REITs recorded an average DPU of 82 Singapore cents (59 US cents) in the first quarter of 2020. This is a cut of more than half of last year’s SG$1.89 registered in Q1 2019.

SPH REIT had one of the most significant DPU declines at 78.7%. Lippo Malls Indonesia Retail Trust followed with a drop of 78.2% and Capitaland Mall Trust reported a decrease of 70.5%.

Dasin Retail Trust’s DPU fell by 58.2% while Frasers Centrepoint Trust’s DPU dropped 48.7%. Sasseur REIT’s DPU was least affected with a decline of 18.7%.

While not all retail REITs’ data are included in the calculations, the estimate gives an idea of the extent of the fall in DPU by the sector.

Data from four other retail REITs were not included in the average computation. Starhill Global REIT did not report a Q1 DPU due to a change in distribution frequency. United Hampshire US REIT had no distributions because it just had its Initial Public Offering (IPO) in March.

Capitaland Retail China Trust and BHG Retail REIT have not disclosed their financial statements yet as of writing.

Prudence prevails

The decline in DPU was a general move of prudence across retail REITs, as most of them retain a significant chunk of their distributable income for cash flexibility during uncertain times.

To cope, SG retail REITs implemented measures to mitigate the effects of the Covid-19 disruptions on their operations. Aside from the government-mandated rental rebates, retail REITs have launched online marketing initiatives to boost tenant sales through the internet. One REIT also announced 10% pay cuts for its CEO and senior staff as a show of solidarity.

The emerging consensus among Singaporean retail REITs is that performance will not go back to normal even after the lifting of Singapore’s Circuit Breaker.

REITAsiaPac has compiled details on how Singapore REITs were affected by Covid-19, their response and their outlook for the near future. The details below are based on reports and business updates as published on their websites and disclosed on the SGX.

Capitaland Mall Trust

Response: CMT announced that it would pass on the full savings from their property tax rebates granted by the government to its tenants. According to its latest update, CMT has committed a rental relief package totalling approximately S$114 million. This translates into 100% rental rebates in April and May 2020 for almost all the retail tenants, inclusive of the value of property tax rebates. In addition, CMT launched two e-commerce platforms: eCapitaMall and Capita3eats to drive sales online. 

Outlook: CMT said the impact of Covid-19 on their operations is expected to deepen in the second quarter due to the ‘circuit breaker’ period, when only 25% of its tenants are operating. 


Response: SPH REIT announced that it will pass on fully the property tax rebates from the Singapore government.  On top of the government property tax rebates, SPH REIT has also provided further assistance to their tenants. In February and March 2020, tenant rebates amounting to approximately S$4.6 million have been granted to those affected tenants. SPH REIT Manager’s board of directors also announced that they will be taking a 10% cut of their directors’ fees in a show of solidarity. The CEO of SPH REIT, Susan Leng, will also take a pay cut of 10%, while other senior staff will take pay cuts of 5%. The cuts will be effective from April 2020 and will be reviewed at the end of the year.

Outlook: Susan Leng, CEO of SPH REIT, said: “Covid-19 is an unprecedented crisis that has impacted businesses across the globe. With this in mind, we have proactively employed various strategies to mitigate the impact of Covid-19 on our tenants’ businesses.” 

Frasers Centrepoint Trust

Response: Frasers Property Retail announced that it will provide tenants with additional S$45 million in rental rebates, matching the property tax rebates announced in the government’s Resilience Budget. This is on top of passing on the full property tax rebate to tenants. FCT said these rental rebates will be disbursed to tenants in a targeted manner, prioritised by individual needs and circumstances. Combining the rental rebates, property tax rebates and offsetting of cash security deposits, all their tenants will get some form of relief from rental payments for April and May.

Outlook: As a result, FCT said it expects tenants’ sales for the next few months to be lower than February 2020 due to further impact from Covid-19 and the “Circuit Breaker” measures, which commenced on April 7, 2020, and was extended to June 1, 2020.

Starhill Global REIT

Response: Rental rebates amounting to approximately S$13.7 million were extended in phases to tenants in SGREIT’s portfolio, of which about S$10.8 million relate to the property tax rebate to be received from the Singapore government which will be passed on fully to their tenants in Singapore. SGREIT also said it is evaluating partial rental rebate and deferments for their tenants in Australia. SGREIT’s Australia portfolio contributed approximately 18.2% to the Group’s net property income. SGREIT also implemented measures such as delaying non-essential capital expenditures for SGREIT, saving costs as well as reducing 10% of base management fees payable by SGREIT for the next three months effective from April 2020. 

Outlook: SGREIT said the Covid-19 pandemic is expected to have a significant adverse impact on the REIT’s financial performance, income available for distribution and cash flow for the remaining period of the financial year ending June 30, 2020. They also expect their tenants’ sales and shopper traffic to “decline substantially” in the next quarter following strict social distancing measures as well as lower tourist arrivals.

United Hampshire US REIT

United Hampshire US REIT, the first retail REIT Singapore-listed retail REIT with US exposure, just had their Initial Public Offering (IPO) in early March. The latest statement from the REIT said there is still “too much uncertainty” to project Covid-19’s cash flow impact, but reiterated that they are well-positioned to weather the storm as their tenants are primarily in essential businesses. 

Response: They are currently reviewing requests for rental relief made by several “non-essential business” tenants and food and beverage tenants which are either closed or have their business impacted on a case-to-case basis. Their asset management team is also looking for opportunities to reduce operating costs and reduce or defer non-essential capital spending. The REIT also said they will be filing for tax appeals on all assets. 

Outlook: The REIT said: “with the US Federal Reserve’s interest rate cuts, we entered into interest rate swaps shortly after the IPO and successfully achieved an overall reduction in our average all-in effective interest rate, which will positively impact our cash flow for Forecast Period 2020 and Projection Year 2021,” the REIT said. 

Capitaland Retail China Trust

Capitaland Retail China Trust’s (CRCT) tenant sales dropped by 42.6% in the first quarter of the year, with only 34% of its tenant stores opened. All non-essential services of CapitaMall Saihan, CapitaLand Minzhongleyuan, CapitaMall Xuefu and CapitaMall Aidemengdun were temporarily shut for around a month each as directed by local authorities. 

Response: The REIT gave 100% rental rebate for CapitaMall Minzhongleyuan for the period from January 25, 2020, to February 13, 2020, and 50% rental rebate for all other China malls from January 25 to February 9. To help tenants, they also introduced targeted rental rebates. Aside from relief packages, CRCT also ramped up live streaming of stores, promotions on delivery arrangements and WeChat campaigns to increase online sales. 

Outlook: CRCT said they are expecting short term volatility amidst the still challenging business environment. Improvement in traffic and sales are expected but are not yet back to pre-pandemic levels. They also expect consolidation of storefronts as retailers are realigning their business strategies. 

Sasseur REIT

The four outlet malls in China owned by Sasseur REIT generated combined sales of RMB 534.5 million (S$105 million) in the Q1 2020, 55.7% lower than Q1 2019, as a result of the operational disruptions and temporary closures. 

Response: Sasseur REIT plans to undertake asset enhancement initiatives during Q2, including repositioning Chongqing outlets as a lifestyle and shopping destination for both local consumers and tourists from other parts of China. Block B of Hefei Outlets will be repositioned into a sports-themed shopping complex, with space maximisation and conversion of pedestrian walkways to increase shopper traffic between Blocks A and B.

Outlook: The REIT said China was among the first countries to begin to recover and restart its economy in April 2020. As their main operations are in China, they are expecting recovery on their performance from Q2 onwards. 

Dasin Retail Trust

Dasin Retail Trust’s revenue declined by 21% year-on-year due to the impact of Covid-19. Its revenue was S$17.5 million in Q1 2019 down to S$13.7 million in Q1 2020. 

Dasin Retail Trust’s Response: The REIT announced rental rebates amounting to S$6 million in February and March and an additional S$1.9 million in April. They have also live-stream malls through their app and make influencers host broadcasts to promote items sold at malls. 

Dasin Retail Trust’s Outlook: Dasin Retail Trust said uncertainties are expected in the short term, and the business environment remains challenging. However, they remain optimistic about their performance for the second half of 2020.


BHG Retail REIT was affected as the pandemic forced the temporary closure of stores at Hefei Mengchenglu & Hefei Changjiangxilu for about a month. All malls save for the two Hefei properties remained open throughout Q1 2020. The REIT also said tenants’ businesses had been adversely impacted.

Response: BHG Retail REIT is offering relief arrangements to qualifying tenants. These include rental rebates, new innovations such as real-time in-shop experience, live broadcasting, and Wechat groups for members and tenants for promotions. 

Outlook: Amid challenging times, the REIT said they continue to explore acquisition opportunities in both Right of First Refusal and third-party quality income-producing retail properties. 

Lippo Malls Indonesia Retail Trust

LMIR Trust had extended the temporary closure of affected retail malls and retail spaces in Indonesia till June 4, 2020, except Lippo Plaza Kendari. 

Response: The REIT said it will not be collecting rent from those tenants unable to operate their businesses in the mall. 

Outlook: LMIR Trust said they expect an adverse second quarter as their malls have been temporarily closed in a staggered way from March. Despite reducing operating costs by 305 to 40% with a 70% reduction in utilities and 50% in outsourced security and cleaning services, LMIR Trust said their net property income is expected to be significantly lower in Q2 due to the mall closures.

Gross Revenue  (Q1 2020) Gross Revenue  (Q1 2019) Percentage Change DPU (Q1 2020) (Singapore Cents) DPU (Q1 2019) (Singapore Cents) Percentage Change
SPH REIT* S$73 Million S$58 Million 26.1% 0.30 1.41 -78.7%
Lippo Malls Indonesia Retail Trust  S$65 Million S$66 Million -1.5% 0.12 0.55 78.2%
Capitaland Mall Trust S$204.3 Million S$192.7 Million 6% 0.85 2.88 -70.5%
Dasin Retail Trust S$13.7 Million S$17.4 Million -21% 0.71 1.70 -58.2%
Frasers Centrepoint Trust S$49.7 Million  S$50.2 Million -0.9% 1.61 3.137 -48.7%
Sasseur REIT S$24.99 Million (EMA Total Rental Income) S$30.12 Million (EMA Total Rental Income) -17.1% 1.334 1.656 -18.7%

*SPH REIT’s Q1 report ends in end-February