Our REIT table (in issue 1094) shows Sabana Industrial REIT received a base fee of $4.4 million, and property management fees of $2.8 million giving a total of $7.25 million in fees. The fees received by HSBC Institutional Trust Services (HSBC Trustee) was $355,000. A quick check shows that Link REIT also reported property management fees. Any entity with a property portfolio would have to incur property management fees.
Based on Sabana Real Estate Investment Management’s (SREIM) last available financial statement for FY2021, for the 12 months to December 31, 2021, its revenue was $5.1 million, and operating profit $1.5 million. Operating costs amounted to $1.27 million, and staff costs $2.1 million. Other costs were non-cash, such as depreciation. Hence, annual costs to run the manager (internal or external) is around $3.4 million.
SREIM reported some finance expense, and of course paid tax. The net profit of the manager in FY2021 was a paltry $1.26 million. The operating and free cash flow figures are lower than the net profit.
