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Sabana Reit declares 1.2% more DPU in Q2

SABANA Shari'ah Compliant Industrial Real Estate Investment Trust (Sabana Reit) is giving out 1.2 per cent more distribution per unit (DPU) for the second quarter ended June 30 than a year ago at 0.82 Singapore cent.

In the year-ago period, the Reit manager had forgone 25 per cent of its fees - about S$310,000 - which brought the year-ago amount available for distribution higher.

Gross revenue was 8.6 per cent lower in the quarter ended June at S$20.1 million, mainly on lower contribution from some of the Reit's multi‐tenanted properties as well as non‐contribution from 1 Tuas Avenue 4, which is vacant, and 6 Woodlands Loop, which was divested in the first quarter. This was partially offset by improved occupancy in 39 Ubi Road 1. 

Net property income decreased by a smaller 2.8 per cent to S$12.6 million, mainly on cost savings relating to non-performing assets. Overall occupancy levels for the Reit's portfolio improved to 84.5 per cent as at June 30, from 84.1 per cent as at end-March.

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The Reit manager said its growth plan is underway, with Phase 1 of this strategy already being executed in the fiscal first quarter with the divestment of non‐performing assets.  

"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 Sabana Real Estate Investment Management.

"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. 

"As our industry continues to face headwinds, all options consistent with our strategy will be considered, to put us in a good position to pursue growth opportunities, including undertaking asset enhancement initiatives (AEIs). As for New Tech Park, discussions with the authorities on the proposed AEI are ongoing and we hope to receive feedback in H2 2018."  

Units of Sabana Reit closed 1.1 per cent lower at 44 Singapore cents on Wednesday.