SINGAPORE - Sabana Industrial Real Estate Investment Trust (Sabana Reit) posted a distribution per unit (DPU) of 1.15 cents for the half-year ended Dec 31, 2023, down 21.2 per cent from the year-ago period.

In a bourse filing on Jan 23, the trust manager said the decline was the result of 10 per cent of the total available for distribution being retained for “prudent capital management, in view of additional costs incurred and to be incurred in connection with the internalisation (of the Reit’s manager)”.

Gross revenue for the second half of 2023 rose 13 per cent year on year to $56.6 million from $50.1 million, lifted by positive rental reversions across the portfolio as the overall occupancy rate remained stable.

Net property income (NPI) improved slightly to $27.8 million in the second half of 2023 from $26.3 million in the corresponding period a year ago.

The second-half results bring Sabana Reit’s financial year 2023 DPU to 2.76 cents, down 9.5 per cent from 3.05 cents in FY2022.

For the full year, gross revenue was up 17.9 per cent to $111.9 million, from $94.9 million in FY2022; NPI rose 3.2 per cent to $55 million on the back of three consecutive years of positive double-digit rental reversions and a stable overall occupancy rate, said the manager.

As at end-December 2023, the Reit’s portfolio occupancy rate remained at 91.2 per cent, unchanged from the previous year.

The manager said this data excludes 1 Tuas Avenue 4, which is undergoing asset-enhancement works. 

The Reit, which has 18 properties under its management, achieved a higher portfolio valuation of $903.9 million as at end-2023, up 2.1 per cent year on year.

This was attributed to ongoing asset-enhancement initiatives, asset rejuvenation and higher signing rents for both new and renewed leases across the portfolio, said the manager.

With an aggregate leverage of 34.3 per cent as at end-2023, the Reit has a debt headroom of $145.7 million. The manager added that the portfolio’s weighted-average lease expiry has remained consistent at three years, underpinned by proactive leasing efforts.

The manager expects interest rates to stay elevated and operating costs to remain high. It will continue to aim to convert all financing facilities into sustainability-linked or green loans by 2025.

Units of Sabana Reit ended Jan 23 unchanged at 39 cents. THE BUSINESS TIMES