Against the backdrop of challenging industrial market conditions, Sabana REIT has reported slight improvements in its occupancy and distribution per unit (DPU) for 2Q 2018.
The industrial REIT’s DPU came in at 0.82 Singapore cents for the period, 1.2% higher than what was achieved in the corresponding quarter of 2017.
Gross revenue for the period fell 8.6% year‐on‐year, due to lower contribution from some of its multi‐tenanted properties, as well as the lack of revenue from the vacant 1 Tuas Avenue 4, and 6 Woodlands Loop, which was divested in 1Q 2018.
Accordingly, Sabana REIT’s net property income decreased by 2.8% y‐o‐y to SGD12.6 million (USD9.2 million).
However, the REIT has managed to reduce property expenses by 16.8% on lower impairment losses for 1 Tuas Avenue 4, and 6 Woodlands Loop, as well as lower property expenses for 6 Woodlands Loop.
“The process of improving the business has commenced, as evidenced by the increase in DPU and occupancy in the quarter”, said Donald Han, CEO of the REIT’s manager.
“This was achieved by maintaining discipline in executing phase 1 of our strategy, which focuses on divesting non‐performing assets and optimising our portfolio, while keeping a tight rein on costs”, he added.
In the earlier part of the year, Sabana REIT articulated a three-phased strategy to improve its business, rejuvenate its portfolio, and deliver better value to unitholders.