Sabana REIT's logistics facility at Tai Seng Drive, Singapore. (Photo: REITsWeek)Sabana REIT's logistics facility at Tai Seng Drive, Singapore. (Photo: REITsWeek)

Singapore-listed Shari’ah-compliant industrial REIT, Sabana (SGX:M1GU), announced on 20 April that it has achieved a distributable income of approximately SGD13.0 million for 1Q 2015, an increase of 0.6% from SGD12.9 million in 4Q 2014.

This translates to a distribution per unit (DPU) of 1.78 Singapore cents, a fall of 5.3% from that of 1Q 2014. Sabana REIT has attributed the fall to an approximately 5.1% increase in the number of Sabana REIT units from a year ago.

However gross revenue has increased by 3.2% in 1Q 2015 as compared to the corresponding period in 2014 largely to the income contributions from 10 Changi South Street 2, which Sabana REIT acquired in December 2014.

Chief Executive Officer and Executive Director of Sabana REIT’s manager, Kevin Xayaraj, has said that current portfolio occupancy is continuing to weigh down on the REIT’s overall performance.

“We are steadily making headway with many of our negotiations with existing as well as potential tenants”, he said. “We will continue to proactively manage the near‐term fluctuations from Sabana REIT’s lease expiry/renewal cycle to improve occupancy levels through aggressive marketing and leasing efforts.”

As at 31 March 2015, the portfolio’s weighted average lease expiry (WALE) is approximately 2.2 years while overall occupancy was maintained at 90.6%.

Sabana REIT’s weighted average borrowing maturity was approximately 2.8 years, all‐in cost of borrowings was 4.2% per annum, with 88.0% of its profit rate fixed. The aggregate leverage ratio stands at 38.0%.

Units of Sabana REIT are currently listed on the Singapore Exchange at SGD0.88.

Sabana REIT's logistics facility at Tai Seng Drive, Singapore.
Sabana REIT's logistics facility at Tai Seng Drive, Singapore.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.