Sasseur REIT rejects Xi’an outlet acquisition under ROFR

Sasseur flags DPU and NAV dilution risk.

Sasseur Real Estate Investment Trust rejected an offer from its sponsor to acquire the Sasseur (Xi’an) Outlets in China after determining that the proposed transaction would not be accretive to distribution per unit.

The offer was made under a right of first refusal granted in March 2018 and related to a proposed listing vehicle on the Shanghai Stock Exchange.

Sasseur said acquiring the property on the proposed terms would result in material dilution to both distribution per unit and net asset value per unit, based on reasonable funding cost assumptions.

It added that the transaction would not align with Sasseur REIT’s objectives of achieving long-term sustainable growth whilst maintaining an appropriate capital structure.

The rejected asset is a retail outlet mall in Xi’an, with the offer submitted by Sasseur Cayman Holding Limited, the sponsor of the REIT. DBS Trustee Limited, in its capacity as trustee of Sasseur REIT, formally rejected the offer following the Sasseur's assessment, the filing said.

Sasseur said acquisitions of ROFR assets in China are not currently opportune and that it will instead pursue high-quality, DPU-accretive opportunities aligned with its portfolio strategy.

It added that this includes exploring selective investments in South-East Asia and other compatible regions where transactions offer a clearer path to enhancing long-term value for unitholders.

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