Sabana REIT's property near Serangoon, New Tech Park. (Photo: REITsWeek)Sabana REIT's flag property near Serangoon, New Tech Park. (Photo: REITsWeek)

Singapore-listed Sabana REIT has recorded a DPU of 1.20 Singapore cents for its 3Q 2016, a fall of 32.2% from the 1.77 cents recorded in the corresponding period of 2015.

Gross revenue and net property income for the period came in at SGD23 million (USD16.5 million), and SGD14 million (USD10 million), falling by 9.7% and 24% year-on-year respectively.

Correspondingly distributable income for the period came in at SGD8.8 million, a fall of 31.7% from the SGD13 million recorded in 3Q 2015.

The REIT has attributed the quarter's results to higher property expenses, non-renewal of 218 Pandan Loop’s triple-net master lease in 4Q 2015, and higher net impairment losses arising from the master tenant at 1 Tuas Avenue 4, whose arrears were in excess of the security deposit held.

Sabana REIT also cited figures from Knight Frank, estimating that industrial rents could fall between 6% and 8% in 4Q 2016, in a statement on its outlook for the quarters ahead.

“Even though the manager anticipates market conditions to remain challenging, it will continue to stay proactive in managing the lease expiry profile, be aggressive in its marketing and leasing efforts to increase the trust’s portfolio occupancy, and take necessary measures to mitigate potential credit risks”, said the REIT.

The Singapore-listed industrial REIT’s aggregate gearing for 3Q 2016 was at 41.5%, up slightly from the 41.2% in 2Q 2016.

Units of Sabana REIT finished the trading day about 1% lower from its previous close on the Singapore Exchange to end at SGD0.525.

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.