SINGAPORE (Apr 23): The manager of Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (Sabana REIT) has announced distribution per unit (DPU) of 0.88 cents for the 1Q ended March, unchanged from a year ago.
Gross revenue fell 4.4% to $21.0 million in 1Q18, from $22.0 million a year ago.
This was mainly due to lower contribution from certain multi-tenanted properties due to lower occupancies; negative rental reversions for certain master leases renewed in the preceding quarter; and non-recognition of revenue from the property located at 1 Tuas Avenue 4, which is vacant.
Net property income (NPI) grew 9.4% to $14.6 million in 1Q18, from $13.3 million a year ago, as result of a 25.8% decrease in property expenses.
The decline was mainly due to net reversal of impairment losses during the quarter upon recovery of trade receivables mainly from the ex-master tenant of 6 Woodlands Loop that was previously impaired; lower impairment losses on 1 Tuas Avenue 4 after it was vacated; and lower property expenses from the divestment of 218 Pandan Loop in 3Q17.
The amount available for distribution in 1Q18 slipped marginally to $9.2 million, some 0.8% lower than $9.3 million a year ago.
The manager says it has elected to forego 20% of its fees in 1Q18 “to cushion the impact on DPU”, which would have otherwise fallen around 2.3% to 0.86 cents.
Sabana REIT’s overall occupancy stood as 84.1% as at Mar 31, 2018.
As at end March, cash and cash equivalents stood at $20.3 million.
“There are near-term headwinds facing our sector and Sabana REIT will inevitably be impacted by this, but we are already in the process of turning things around for the longer term,” says Donald Han, chief executive officer of Sabana REIT.
“Our immediate priorities are to boost occupancy by engaging closely with agents and tenants, and to recycle divestment proceeds so we can pursue value-accretive propositions including asset enhancement initiatives,” he adds.
Units of Sabana REIT closed half a cent lower at 42.5 cents on Monday.
