The manager of Sabana Industrial REIT has reported portfolio occupancy of 85.2% for the 1QFY2022 ended March. Excluding the REIT’s property at 1 Tuas Avenue 4 which is marked for redevelopment, occupancy would have been at 88.2%.
As at March 31, the REIT’s weighted average lease expiry (WALE) stood at 2.7 years.
During the quarter, the manager renewed 208,633 sq ft of leases with a positive rental reversion of 4.0%. Of the leases expiring in 2022, some 44.1% of them were renewed. There are no master leases expiring till 2023.
The REIT’s total borrowings stood at $305.5 million as at March 31, with an aggregate leverage of 34.8%.
According to the REIT manager, 72.8% of borrowings are on fixed rates with an average term of 2.7 years. With a potential increase of every 20 basis points, the REIT may experience a $0.16 million decrease in distributable income or 0.02 cents per distribution per unit (DPU) per annum.
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Table: Sabana REIT
Donald Han, CEO of the manager says, “We delivered steady performance for 1QFY2022 despite the challenges posed by continuing geopolitical and macroeconomic uncertainty, as we execute on the Grow VALUE phase of our strategy. To date, we have renewed 44.1% of leases expiring this year and did so at positive rental reversion, while keeping portfolio occupancy steady at 85.2%.”
“Moving ahead, we will kickstart asset enhancement initiative (AEI) at 1 Tuas Avenue 4 and expand our rejuvenation efforts and longer-term Phase 3 maximisation of plot ratio AEI at our crown jewel New Tech Park with an eye to upsize our portfolio value.
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“One pillar of our Grow VALUE phase is to make the REIT more ESG-focused. To that end, we have engaged consultants to work with us to relook and reimagine our portfolio to be more environmentally efficient and future-proof,” he adds.
Further to his statement, Han says the REIT is keeping a “close watch” on rising costs amid the current inflationary environment.
“For this reason, we are proactively taking measures to reduce overall utility consumption across our portfolio and are initiating this process at 508 Chai Chee Lane. This will allow us to mitigate the impact from rising energy prices in the medium term and better future-proof the REIT over the longer run to deliver value for our unitholders,” he says.
The REIT manager will be seeking a “firm mandate” from its unitholders at its upcoming annual general meeting (AGM), Han adds.
Units in Sabana REIT closed at 45 cents on April 20.
