Sabana Shari’ah Compliant REIT’s 1H15 Earnings Down 3.3%

Sabana Shari’ah Compliant REIT announced 1H15 revenue of $50.8 million, a marginal 1.7 percent increase from 1H14.

Net property income inched up 0.8 percent mainly due to higher gross revenue mainly contributed by the recently acquired asset at 10 Changi South Street 2, and partially offset by relatively higher property expenses.

In the absence of a $3 million gain from the net change in fair value of financial derivatives recognised last year, earnings fell 3.3 percent to $22.5 million.

While the manager anticipates market conditions to remain challenging, it will actively manage the REIT’s lease expiry profile and continue to be aggressive in its marketing and leasing efforts to increase its portfolio occupancy. On the 11 master leases expiring in year 2015, it is in the process of renewing or securing new master leases for eight of them. The remaining three properties will likely be converted into multi-tenanted buildings.

The manager also intends to divest underperforming or non-core assets to recycle Sabana REIT’s capital and is evaluating opportunities to do so.

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