In its interim business update for the 3QFY2022 ended Sept 30, Sabana REIT reported a total portfolio occupancy of 89.1%, up by 0.9 percentage points q-o-q. This is also a new high for the REIT since 3QFY2017.
Excluding 1 Tuas Avenue 4, which is currently undergoing asset enhancement initiatives (AEIs), the REIT’s total occupancy would have stood at 92.2%.
During the quarter, the REIT manager signed a total of 83,588 sq ft of new leases with tenants, down from the 196,615 sq ft of new leases signed in the previous quarter.
In the 3QFY2022, the REIT logged a positive rental reversion of 10.2% over a renewal of 71,266 sq ft of leases, 7.2 percentage points lower q-o-q. The quarter’s results makes it the REIT’s 10th positive quarter revision in the past 11 quarters.
As at Sept 30, Sabana REIT’s weighted average lease expiry (WALE) stood at 2.7 years, down from its WALE of 2.8 years in the 2QFY2022.
As at Sept 30, the REIT’s aggregate leverage ratio stood at 33.7%, 0.3 percentage points higher compared to the period ended June 30.
In its presentation, the REIT manager noted that several macro factors, including high energy prices, rising interest rates and the “prevailing significant risks in the global economy” are continuing to weaken the overall market outlook for Singapore.
Donald Han, CEO of the manager adds: “Despite the higher utility and operating costs, we have continued to deliver on our performance… As we forge ahead, we are doing our utmost to manage our costs, optimise our funding sources, and seize opportunities that will enhance our portfolio resilience.”
Looking ahead, Han says that the REIT will be enhancing its existing properties “to cater to changing market and tenant requirements”.
“1 Tuas Avenue 4 is a testament to our broader commitment to reduce our carbon footprint through the planned additions and alterations (A&A) of the existing structure. Additionally, we made the strategic decision to opt for A&A instead of a redevelopment as it requires a relatively shorter project timeline and will allow for maximum use of existing building structure,” he adds.
“We are also incorporating environmental considerations across selected properties. These include the planned roll-out of sustainability projects such as energy conservation projects and solar panel installations. Collectively, these efforts are directed towards improving our buildings’ operational efficiency over the medium-term,” he continues.
Units in Sabana REIT closed 0.5 cent lower or 1.22% down at 40.5 cents on Oct 19.