Sabana Reit's DPU for H1 tumbles 65.7% to 0.47 S cent

SABANA Shari'ah Compliant Industrial Real Estate Investment Trust's (Sabana Reit) distribution per unit (DPU) fell 65.7 per cent to 0.47 Singapore cent for the half year ended June 30, 2020 from 1.37 Singapore cents a year ago.

In view of the evolving Covid-19 situation, the manager has decided to temporarily retain 55 per cent of its H1 2020 distributable income to conserve capital, which will be paid out at a later date, it said. Had this amount been included, DPU would have been 1.05 Singapore cents.

"The half year's DPU must also be seen against the higher base in H1 2019 that included a one-time capital gains distribution of S$1.24 million or 0.12 cent," the manager said in a regulatory filing on Thursday morning.

Gross revenue was down 6.7 per cent to S$34.3 million for the half year, from S$36.7 million a year ago. This was mainly attributable to lower average occupancies at certain properties and the expiry and termination of master leases at 3A Joo Koon Circle and 10 Changi South Street 2, the manager added.

Net property income fell 15.5 per cent on the year to S$20.9 million for the six-month period, from S$24.7 million. This was due to lower revenue, as well as a one-time provision for rental waiver and allowances for impairment losses on trade receivables, that were made for certain tenants out of prudence, said the manager.

Distributable income sank 23.3 per cent year on year to S$11.1 million, from S$14.5 million, while total distributable income declared to unitholders for the period tumbled 65.5 per cent to S$5 million from a year earlier.

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The distribution will be paid out on Aug 28, after books closure on July 24.

Looking ahead, Sabana Reit expects to face pressure on its earnings for the rest of the year.

Units in Sabana Reit closed flat at S$0.36 on Wednesday. The trust requested a trading halt on Thursday morning, before its results release, and the announcement of a possible merger with ESR-Reit.