SINGAPORE (July 25): The manager of Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (Sabana REIT) reported unitholders will receive a DPU of 0.82 cent for the 2Q18 ended June, 1.2% higher than in 2Q17.
Distributable income came in at $8.6 million despite challenging market conditions. Gross revenue declined 8.6% y‐o‐y for 2Q18, primarily on lower contribution from some of the trust’s multi‐tenanted properties as well as non‐contribution from 1 Tuas Avenue 4 – which is vacant – and 6 Woodlands Loop – which was divested in 1Q18. This was partially offset by improved occupancy in 39 Ubi Road 1.
Net property income decreased 2.8% y‐o‐y to $12.6 million, versus a decline of 13.8% in 1Q18, mainly on cost savings relating to non‐performing assets. Property expenses were reduced by 16.8% on lower impairment losses for 1 Tuas Avenue 4 and 6 Woodlands Loop, as well as lower property expenses for 6 Woodlands Loop.
In line with its commitment to cost rationalisation, the trust lowered net finance costs y‐o‐y by 9.3% as it utilised net proceeds from the divestment of 218 Pandan Loop and 6 Woodlands Loop to pay down borrowings, and refinanced higher cost convertible sukuk and trust certificates with lower cost facilities.
Manager Sabana Real Estate Investment Management remains well capitalised to service its loans, improving profit coverage to 3.7 times from 3.5 times at 2Q17 and with no refinancing requirements until 2Q19.
Overall occupancy levels for the Ttust improved to 84.5% as at June 30 from 84.1% at March 31.
The previous underperforming manager of Sabana REIT was booted out by disgruntled unitholders last year.
During the Annual General Meeting (AGM) on April 25, the general mandate was returned to the new manager of the REIT.
Amid challenging market conditions, the manager says it will focus on executing its growth plan through active asset management, selective divestments and progressing on proposed AEIs.
Units in Sabana REIT closed 0.5 cent lower at 44 cents on Wednesday.
