Sabana Reit records 85.3% portfolio occupancy in Q3, drops Shari'ah compliance

SABANA Industrial Reit (Sabana Reit) logged a portfolio occupancy of 85.3 per cent as of Sept 30, the highest level since early 2018, its manager announced in a quarterly business update on Thursday (Oct 21) evening.

The Reit, which removed its Shari'ah compliance status as of Thursday, has also named a new chief financial officer, Lim Wei Huang and head of real estate, Jessica Yap Pui Ling. Their appointments take effect on Nov 1.

The three-year high in occupancy was mainly due to the Reit's multi-tenanted properties, where the occupancy rate stands at 90.7 per cent, the highest in nearly eight years. Its new lifestyle mall NTP+, located in New Tech Park in Lorong Chuan, has also attained full occupancy since opening in Q2.

Sabana Reit's manager noted that it has diversified the portfolio's risk profile since 2018. Multi-tenanted properties made up 86.7 per cent of the Reit's gross rental income in Q3 ended Sept, up from 77 per cent a year ago. The remainder of its Q3 gross rental income came from master leases.

By asset type, high-tech industrial properties accounted for 59.1 per cent of gross rental income followed by warehouses and logistics properties at 25.8 per cent.

The Reit also recorded a positive rental reversion of 7.8 per cent in Q3 on the back of 59,729 sq ft of renewed leases. Of this year's lease expiries, 86.1 per cent have been renewed or replaced by new leases. No master leases are expiring until 2023. Weighted average lease expiry (WALE) stands at 2.7 years as of end-Sept.

A NEWSLETTER FOR YOU

Tuesday, 12 pm

Property Insights

Get an exclusive analysis of real estate and property news in Singapore and beyond.

Sign Up

Sabana Reit has also signed 90,600 sq ft of new leases including with MNCs in the healthcare sector and cold chain logistics. Overall, rental reversion averaged at 11 per cent for first nine months of this year.

The Reit on Thursday also completed a refinancing exercise. It has obtained unsecured term and revolving loan facilities of up to S$225 million to refinance the majority of its existing debt maturing this year up till 2023. Its aggregate leverage stands at 34.8 per cent as of end-Sept, largely unchanged from the previous quarter.

Looking ahead, the Reit manager is focused on portfolio rejuvenation. Three properties have undergone upgrading: 151 Lorong Chuan, 8 Commonwealth Lane and 15 Jalan Kilang Barat.

It has also beefed up its ranks with the appointment of the new CFO Lim, who was previously the Reit's senior vice-president for finance and led its refinancing efforts.

Yap, the newly-named head of real estate, was previously Sabana's asset management vice-president. She oversees the leasing and management of the Reit's properties, including retail leasing at NTP+, project and property management initiatives for New Tech Park at 151 Lorong Chuan.

Donald Han, chief executive of the Reit manager, said that the refreshed strategy since 2018 is bearing fruit despite Covid-19 restrictions and that the Reit is "poised for the next phase of growth".

Units of Sabana closed unchanged at S$0.435 on Thursday.