Sabana Industrial REIT's 2H FY24 Review

Basic Profile & Key Statistics

Key Indicators

Performance Highlight

Gross revenue and NPI improved YoY, driven by positive rental reversions across the portfolio. Total income available for distribution also increased, supported by higher NPI and lower expenses related to internalization, despite a rise in finance costs. Additionally, the total distribution amount declared saw a higher proportion due to lower retention compared to the previous year.

Rental Reversion

The rental reversion for 3Q and 4Q stands at 9.7% and 27.1%, respectively. Notably, Sabana has achieved positive rental reversions for 16 consecutive quarters.

Asset Enhancement Initiative

Multiple AEIs are being carried out across the portfolio. 

Related Parties Shareholding

• REIT Sponsor's Shareholding: Less Favorable
• REIT Manager's Shareholding: Less Favorable
• Directors of REIT Manager's Shareholding: Less Favorable

Lease Profile

• Occupancy: Less Favorable
• WALE: Less Less Favorable
• Highest Lease Expiry in 4 Years: Less Favorable
• Weighted Average Land Lease Expiry: Less Favorable

Debt Profile

• Gearing Ratio: Moderate
• Cost of Debt: Moderate
• Fixed Rate Debt %: Moderate
• Unsecured Debt %: Favorable
• WADM: Less Moderate
• Highest Debt Maturity in 4 Years: Moderate
• Interest Coverage Ratio: Moderate

Diversification Profile

• Top Sector Contribution: Favorable
• Top Geographical Contribution: Less Favorable
• Top Property Contribution: Less Favorable
• Top 5 Properties' Contribution: Moderate
• Top Tenant Contribution: Favorable
• Top 10 Tenants' Contribution: Moderate

Key Financial Metrics

• Property Yield: Moderate
• Management Fees over Operating Distributable Income: Favorable
• Operating Distributable Income on Capital: Favorable
• Operating Distributable Income Margin: Less Favorable
• Operating Distribution Proportion: Favorable

DPU Breakdown

• TTM Distribution Breakdown:
• 91.9% from Operation
• 8.1% being Retained

Trends (Up to 10 Years)

• Uptrend: Adjusted Interest Coverage Ratio, Operating Distributable Income on Capital, Operating Distribution Proportion
• Flat: Property Yield
• Slight Downtrend: Committed Occupancy, Operating Distributable Income over Manager's Fees
• Downtrend: DPU from Operations, NAV per Unit, Operating Distributable Income Margin

Price Range & Relative Valuation Metrics

• Dividend Yield: Average for 1y, 5y & 10y; Above +1 SD for 3y
• P/NAV: Above +1SD for 1y; Average for 3y, 5y & 10y

Author's Opinion

Performance has improved compared to the previous half-year period, reflecting stronger operational results. On the debt front, only 2.3% (revolving credit facilities) is set to expire this year. 

On 16 January, the manager received a requisition notice from a former director and unitholders to convene an EGM. The resolutions relate to initiating a price discovery process, with the view of exploring a possible sale of all or a majority of the assets.

Regarding internalization, the trustee has provided the latest update on the indicative timeline, as outlined below:

For more information, check out:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and details of Singapore REIT

REIT Review - List of previous REIT review posts

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my findings and should not be considered professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.