Sabana Industrial REIT reports 1HFY2024 DPU of 1.34 cents, 16.8% lower y-o-y

Felicia Tan
3-min read

Units in Sabana Industrial REIT closed 0.5 cents higher or 1.49% up at 34 cents on July 23.

The manager of Sabana Industrial REIT has reported a distribution per unit (DPU) of 1.34 cents for the 1HFY2024 ended June 30, 16.8% lower y-o-y. There were a total of 1.13 billion units in the REIT as at June 30, compared to 1.10 billion units in the REIT in the same period the year before.

Gross revenue for the six-month period fell by 0.2% y-o-y to $55.2 million with portfolio occupancy declining by 15.1 percentage points y-o-y to 78.8% as at June 30. Rental reversion, however, stood at at a positive 16.8%, but still lower than the 20.1% reported in the 1HFY2023.

Excluding 30 & 32 Tuas Avenue 8 and 33 & 35 Penjuru Lane, which have been repossessed by the REIT manager, Sabana Industrial REIT’s portfolio would have been 91.8% as at June 30.

Portfolio weighted average lease expiry (WALE) fell slightly to 2.7 years as at June 30 from 2.8 years in the year before.

1HFY2024 net property income (NPI) stood stable while income available for distributable fell by 6.6% y-o-y to $16.6 million due to higher finance costs from increased borrowings and higher borrowing costs.

The total distribution amount declared stood at $15.1 million, 15.4% lower y-o-y. The amount is about 90% of the REIT’s distributable income to its unitholders, per its distribution policy. According to the REIT manager, it kept 10% of its distributable income for FY2023 for “prudent capital management” for costs incurred and to be incurred in connection with the internalisation of the manager.

The REIT manager also retained about 10% of its distributable income in 1HFY2024. Further retention of distributable income may be required for 2HFY2024 and FY 2025, it says.

“On the operating front, we have consistently achieved positive rental reversions for 14 consecutive quarters, notwithstanding a challenging macro environment and uncertainties arising from internalisation process. These challenges have been compounded by the unexpected master lease terminations and the consequential repossessions of 33 & 35 Penjuru Lane and 30 & 32 Tuas Avenue 8,” says Donald Han, CEO of the manager.

“Our leasing efforts have produced good results, with about 42% of the total lettable area at 33 & 35 Penjuru Lane leased out and a one-month booking fee received for circa 27% of total lettable area. We have also quickly arranged for a number of prospective tenants to view 30 & 32 Tuas Avenue 8,” he adds.

One of the REIT’s properties, Sabana@1TA4 also obtained its temporary occupation permit (TOP) on July 9 with lease documentation underway with a prospective tenant, Han continues. This will account for about 64% of the property’s total lettable area.

“The REIT’s proactive leasing strategy, asset rejuvenation and focus on tenant management and higher rentals have led to an improvement in portfolio valuation to $914.5 million. We remain firmly focused on extracting value from our existing quality portfolio for sustainable growth,” he says.

Units in Sabana Industrial REIT closed 0.5 cents higher or 1.49% up at 34 cents on July 23.

See Also: