The manager of Sabana Industrial REIT has reported a distribution per unit (DPU) of 1.61 cents for the 1HFY2023 ended June 30, 1.3% higher than the DPU of 1.59 cents for the 1HFY2022.
This set of results comes after the injunction filed by ESR Group against the REIT's manager from holding an EGM was dismissed by the High Court on July 11.
For the first half of FY2023, the REIT’s gross revenue increased by 23.2% y-o-y to $55.3 million mainly mainly driven by a higher portfolio occupancy rate.
The growth in revenue was largely offset by higher property expenses including higher utility costs. Consequently, net property income (NPI) increased by 0.5% y-o-y to $27.2 million for the period.
The total amount available for distribution for the 1HFY2023 stood 3.9% higher y-o-y at $17.8 million higher compared to the corresponding period in FY2022.
As at June 30, the REIT’s overall portfolio occupancy reached a multi-year high of 93.9%, 2.6 percentage points higher than the occupancy rate of 91.3% in 1HFY2022.
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The REIT also achieved record rental reversions of 27.1% and 20.1% for 2QFY2023 and 1HFY2023, respectively, following two consecutive years of positive double digit rental reversions in FY2021 and FY2022
As at June 30, the REIT’s aggregate leverage stood at 32.5%, while cash and cash equivalents stood at $7.6 million, down marginally from the $7.7 million as at June 30, 2022.
Supported by higher rentals, the REIT’s portfolio valuation improved 2.3% y-o-y to $887.5 million as at June 30.
“Despite operational challenges and intensified upheaval in recent months, we have stayed focused and delivered another set of impeccable financial results, with improved gross revenue of $55.3 million, a new high in portfolio occupancy rate of 93.9% and a record rental reversion of 27.1%, all of which translated into a larger total distributable amount of $17.8 million and a higher DPU of 1.61 cents, ” says Donald Han, CEO of the manager.
“Equally important, our proactive tenant management and leasing strategy, including our focus on rentals, has enabled us to protect our valuation and NAV, despite the challenge of declining land tenure,” he adds.
Han says that as the REIT intensifies its “grow value” phase, it is firmly focused on extracting value from our existing portfolio. “We are pleased with the smooth progress of our asset enhancement initiative at 1 Tuas Avenue 4, with major works well on track for targeted completion by 1HFY2024.”
Meanwhile, Tan Cheong Hin, chairman of the REIT’s board of directors, says: “As the REIT progresses on its asset enhancement initiatives (AEI) and sustainability journey, the board, management and staff have all worked diligently to enhance the value of all unitholders, delivering strong results for 1HFY2023.”
“This sterling performance is largely attributable to the commitment and dedication of our team to execute on our grow value phase. We look forward to the continuing support of our unitholders and other stakeholders,” he adds.
Looking ahead, the REIT manager says it notes that the prevailing geopolitical risks and persistent inflationary pressures provide a challenging backdrop for the Singapore economy, and will remain vigilant to downside risks in view of the contraction of Singapore’s overall manufacturing activity in the second quarter of 2023.
