Ahead of its business update for the 1QFY2023 ended March 31, the manager of Sabana Industrial REIT M1GU announced that it has executed a total of 25 new and renewed leases totalling 336,650 sq ft during the quarter.
The strong lease momentum, attributed to the robust demand from third-party logistics (3PLs), has brought Sabana’s portfolio occupancy to 92.6% as at March 31, which is up by 1.4 percentage points q-o-q from 91.2% as at Dec 31, 2022. The figure does not include the REIT’s property at 1 Tuas Avenue 4, which is undergoing asset enhancement initiatives (AEIs).
The new leases were for tenants at the REIT’s warehouse properties at 10 Changi South Street 2, 34 Penjuru Lane and 51 Penjuru Road.
The new lease at 10 Changi South Street 2 totals some 24,300 sq ft whereas the new lease for 34 Penjuru Lane spanned around 30,530 sq ft. At 51 Penjuru Road, the REIT secured two new leases, with both tenants collectively occupying approximately 66,000 sq ft. All tenants procured are 3PLs.
Separately, the REIT manager successfully closed a forward renewal of the master lease with global technology distributor and solutions provider Avnet and its subsidiaries at 26 Loyang Drive. The lease, which had positive rental reversion, brought the REIT’s rental reversion to 13.6% for the 1QFY2023.
Avnet and its subsidiaries are one of the REIT’s top 10 tenants by gross rental income (GRI), accounting for 5.2% of the REIT’s total contribution in FY2022. The next master lease due for renewal in the REIT’s portfolio will be in the 2HFY2024.
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26 Loyang Drive has a gross floor area of about 149,000 sq ft and is part of the REIT’s warehouse and logistics segment.
Further to its statement, the REIT manager announced that its high-tech industrial property, 15 Jalan Kilang Barat saw an improvement in leasing activities in 1QFY2023. Here, three new leases totalling 9,100 sq ft were secured and occupancy stands at 81.0% as at March 31, 15.1 percentage points higher q-o-q from 65.9% as at Dec 31, 2022.
“We have had a busy first quarter and are expecting the strong leasing momentum to remain in the second quarter. The new tenancy leases and lease renewals in the Warehouse and Logistics segments have enhanced our portfolio resiliency and support our ‘Grow Value’ phase. As landlord, we are committed to grow together with our tenants and support their expansion plans,” says Donald Han, CEO of the manager.
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“On a broader level, the manager seeks to strengthen the REIT’s tenant mix to include tenants from the defensive and expansionary sectors and ensure a well-diversified tenant base to enhance cash flow resilience against current global challenges,” he adds.
Sabana REIT will release its business update for the 1QFY2023 on April 19.
Units in Sabana REIT closed 1.5 cents lower or 3.19% down at 45.5 cents on April 10.
