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

Sabana REIT has reported a DPU of of 0.88 Singapore cents for its 4Q 2016, a fall of 32.8% year-on-year from the 1.31 cents reported in the corresponding period of the previous financial year.

Gross revenue and net property income (NPI) for the quarter came in 8.2% and 14.7% lower year-on-year at SGD22.5 million (USD15.8 million) and SGD13.9 million respectively, while distributable income fell by 16.1% to SGD9.2 million.

Subsequently DPU for FY 2016 came in at 4.17 cents, a drop of 30.4% from the 5.99 cents paid in the previous financial year.

The Singapore-listed industrial REIT has attributed the results mainly to negative rental reversions, lower occupancies, and absence of income from properties that were divested in 1Q 2016.

Sabana REIT’s total portfolio occupancy for the quarter was at 87.2% with a portfolio weighted average lease to expiry (WALE) of 2.7 years.

During the quarter, Sabana REIT’s aggregate leverage increased from 41.5% to approximately 43.2% mainly due to year-end revaluation loss on investment properties.

The REIT has however said that it expects the gearing to fall by 3.2% to approximately 40.0%, upon successful completion of its rights issue in January 2017.

“Despite the subdued outlook for the global economy and the Singapore industrial property market, the manager will continue to stay proactive in managing the lease expiry profile and maintain rigorous marketing and leasing efforts to increase the [REIT’s] portfolio occupancy”, said Sabana REIT in a statement on the results.

REITsWeek reported on 24 January that a group of Sabana REIT unitholders have come together to demand for a change in management. Read: Sabana REIT faces calls for management change amid questions over performance.

The REIT has not responded to requests for comments on the movement.

Units of Sabana REIT finished the trading day 1.3% higher from its previous close on the Singapore Exchange to end at SGD0.375.

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.