Steady FY2025 Performance with Resilient Distribution Growth. Sasseur REIT (SGX: CRPU, “SASSR”) delivered a stable operating performance in FY2025, demonstrating strong resilience and defensive characteristics. DPU increased 5.3% YoY to 3.083 Singapore cents in 2H25, bringing full-year DPU to 6.138 Singapore cents, up 0.9% YoY. The improvement was supported by a 3.3% YoY increase in 2H25 EMA rental income in RMB terms, driven by the annual 3.0% fixed rental escalation and a 3.9% increase in variable rental income as outlet sales continued to recover. Against a still-elevated interest rate backdrop, SASSR’s 9.0% distribution yield offers investors an attractive and relatively stable income stream, reinforcing its defensive appeal amid ongoing macro uncertainty.

Improving Capital Structure with Lower Funding Costs and Extended Debt Maturity. SASSR continued to strengthen its balance sheet in FY2025 through prudent capital management, lower borrowing costs, and proactive refinancing. As of end-2025, aggregate leverage remained at a sector-low level of 25%, providing a meaningful buffer against market and operational volatility. The interest coverage ratio improved to 4.7x, indicating sufficient headroom to absorb potential earnings fluctuations and support sustainable debt servicing. At the same time, the weighted average cost of debt declined sharply from 5.3% to 4.4%, representing a 90 bps reduction and providing direct support to DPU. Management noted that every 50 bps reduction in RMB borrowing costs could add approximately 0.2 Singapore cents to annual DPU, highlighting the meaningful earnings sensitivity to lower financing costs. Importantly, 100% of borrowings are denominated in RMB, matching the REIT’s RMB-denominated rental cash flows and creating a natural hedge against RMB/SGD currency volatility. In addition, SASSR meaningfully extended its debt maturity profile, with average debt tenor increasing from 2.5 years to 4.2 years as of end-2025, supported by a well-laddered maturity structure that reduces refinancing concentration risk.

Further Balance Sheet De-risking in FY2026. In March 2026, SASSR further reduced refinancing risk by proactively refinancing onshore bank loans originally due in 2028 and extending their maturity to 2031. The refinancing was completed at highly competitive pricing, allowing the REIT to lock in favorable funding terms well ahead of schedule. As the full-period impact of this refinancing has yet to be fully reflected in reported financials, SASSR’s financing cost advantage and financial safety cushion are expected to improve further in the coming periods. As a result, the weighted average financing cost is likely to decline further in 2026, supporting better earnings visibility and more sustainable distribution growth.

Well Positioned to Capture China’s Value-for-Money Consumption Trend. SASSR is well positioned to benefit from China’s evolving domestic consumption landscape, where outlet retail remains aligned with consumers’ increasing focus on value-for-money purchases. The outlet format has shown clear defensive qualities, supported by resilient footfall, attractive pricing, and a diversified tenant base. Portfolio sales rose 2.6% YoY in FY2025, led by Chongqing Liangjiang Outlet, which delivered a record annual sales high with 5.1% YoY growth. Portfolio occupancy remained close to record levels, reaching 98.8% in 4Q25, supported by proactive lease management. Tenant concentration risk remains manageable, with the top 10 tenants contributing approximately 17% of income and no single tenant accounting for more than 5%. Meanwhile, VIP membership continued to expand at a double-digit pace, with a four-year CAGR of 17%. VIP members contributed over 60% of total portfolio sales, reflecting strong customer stickiness and effective loyalty programs. Targeted asset enhancement initiatives also supported operational momentum, including the upgrade of energy-efficient HVAC systems at Chongqing Liangjiang Outlet to reduce carbon footprint and improve shopper comfort, as well as the reconfiguration of approximately 6,000 sqm at Hefei Outlet into a multi-tenanted sports concept zone to enrich the trade mix and attract a younger consumer base.

Attractive Valuation with Potential for Re-rating. SASSR currently trades at SGD 0.66 per unit, implying a market capitalization of approximately SGD 835 million. At this level, the REIT offers a compelling distribution yield of 9.0% and trades at approximately 11x forward P/E based on FY2026 estimates, which remains well below the peer group average of around 18x P/E and 5.8% dividend yield. This valuation gap suggests that SASSR remains attractively positioned relative to peers, particularly given its low leverage, improving financing cost profile, and resilient operating fundamentals. As policy support for domestic consumption in China continues to gain traction and investor confidence in the outlet retail format gradually rebuilds, SASSR’s current risk-reward profile appears increasingly favorable for income-oriented and value-focused investors.