The manager of Sabana Industrial Real Estate Investment Trust (Sabana REIT) has posted distribution per unit (DPU) of 1.57 cents for the 2HFY2021 ended Dec 31, 2021, 31.4% lower than DPU of 2.29 cents for the same period a year ago.
This brings DPU for the FY2021 to 3.05 cents, up 10.5% y-o-y from the DPU of 2.76 cents in the FY2020.
The decline seen in the half-year period was mostly due to the higher base seen in the 2HFY2020. The higher amount in the 2HFY2020 includes one-off rollover adjustments from previous years, as well as the withheld DPU retained from the 1HFY2020 for prudent cash management amidst uncertainties due to Covid-19.
On a like-for-like basis, excluding the impact of the adjustments and the previously withheld DPU, the REIT’s DPU for the 2HFY2021 grew by 11.3% y-o-y from the 1.41 cents in the 2HFY2020.
2HFY2021 distributable income fell by 6.5% y-o-y to $16.9 million due to the higher base in the 2HFY2020 on the back of the withheld distribution in the 1HFY2020.
Gross revenue in the 2HFY2021 improved by 14.4% y-o-y to $42.8 million on the back of higher contribution from 151 Lorong Chuan, 23 Serangoon North Avenue 5 and 10 Changi South Street 2 due to higher occupancy rates.
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During the half-year period, property expenses also increased by 21.3% y-o-y to $16.6 million.
Accordingly, net property income (NPI) for the 2HFY2021 grew by 10.4% y-o-y to $26.3 million on the higher revenue.
In the FY2021, gross revenue rose 14.2% y-o-y to $81.9 million. Property expenses stood 10.7% y-o-y higher at $30.0 million.
To this end, FY2021’s NPI improved by 16.4% y-o-y to $52.0 million.
Total distributable income for the period stood 11.7% y-o-y higher at $32.5 million.
As at Dec 31, 2021, the REIT’s total occupancy rate improved 8.9 percentage points y-o-y to 85.4%, which is its highest since 2018.
The improvement was due mainly to the 100% occupancy at its new lifestyle mall, NTP+ within New Tech Park. Of its 18 properties, 12 of them had also reached occupancy rates of 90% and above as at end-December in 2021.
During the FY2021, the REIT achieved positive rental reversion of 10.5%, compared to the 0.9% in the FY2020. Its weighted average lease expiry (WALE) stood at 2.7 years as at Dec 31, 2021, with an overall higher portfolio valuation of $866.2 million as at Dec 31, 2021.
As at end-December, cash and cash equivalents stood at $25.9 million, nearly three times higher than the amount of $9.5 million in the same period the year before.
“2021 was a key inflection point for Sabana Industrial REIT as reflected in our latest FY2021 results. This has borne fruit from the refreshed strategy we unveiled in January 2018, that had three phases to ‘go back to basics’, and look ‘within’ for stability and growth. We were undaunted despite being one of the smaller REITs in Singapore,” says Donald Han, CEO of the manager.
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“Today, we have stabilised and uplifted Sabana’s performance and are ready to further intensify Phase 2 and move into Phase 3 of our refreshed strategy to execute growth,” he adds. The REIT had maintained a “disciplined focus” on converting several master leases into “multi-tenancies, proactive asset enhancement initiatives (AEIs) and multiple asset rejuvenations” during the first and second phases.
During the period, the REIT also sold assets and brought down its gearing, in addition to enhancing returns by attracting “expansionary tenants” in growth sectors, improved occupancy and increased portfolio value.
“Despite the ongoing pandemic and with 18 properties (vs 20 in 2018), our FY2021 performance has improved significantly over FY2020’s and is comparable with FY2018’s. Now that we have built firm foundations, we look forward to 2022 as one that will see us grow value for unitholders, guided by our five strategic priorities as we set our target of achieving a portfolio valuation of more than $1 billion in three to five years,” continues Han.
Looking ahead, the REIT says it has placed five strategic value priorities for phases two and three. These include building on value, pursuing accretive acquisitions, optimizing leverage and capital structure, upsizing its portfolio and advancing environmental, social and governance (ESG) principles in its goals.
In addition, the REIT seeks to achieve a portfolio valuation of over $1 billion in the next three to five years.
As at Dec 31, 2021, the REIT’s portfolio valuation stood at $866.2 million.
“Phases 1 and 2 of Sabana’s refreshed strategy have been well executed by the REIT despite unprecedented economic and industrial challenges amid the pandemic. With phases 2 and 3 comprising AEIs and asset acquisitions on the cards from 2022 onwards, the board and management will remain resolute in enhancing unitholder interests,” says Tan Cheong Hin, chairman of the manager.
“Beyond striving for improved portfolio performance, the manager will exercise prudent capital management with optimal leverage as it stays guided to building value and aligning with environmental, social and governance commitments in growing beyond,” he adds.
Units in Sabana REIT closed at 45 cents on Jan 19.
Photo: Sabana REIT
