Sabana Industrial REIT has reported a distribution per unit (DPU) of 2.86 cents for the FY2024 ended Dec 31, 2024, 3.6% higher y-o-y. There were a total of 1.13 billion units in the REIT as at Dec 31, 2024, compared to 1.11 billion units in the REIT in the same period the year before.
Gross revenue for the full-year rose by 1.3% y-o-y to $113.3 million, thanks to a four-year high positive rental reversion in the period.
On the other hand, portfolio occupancy slipped to 85.0% compared to 91.2% as at the FY2023. This was largely due to the repossessions of 33, 33A & 35 Penjuru Lane on Mar 8, 2024, and subsequently, 30 & 32 Tuas Avenue 8 Jun 14, 2024.
Despite this, net property income (NPI) for FY2024 increased by 4.5% y-o-y to $57.5 million, thanks to higher revenue and lower property expenses.
The REIT’s cash and cash equivalents posted a similar uptrend in the period, coming in at $18.5 million, a 15.0% y-o-y increase from FY2023’s $16.1 million.
As at Dec 31, 2024, the REIT’s portfolio weighted average lease expiry (WALE) by gross rental income was 2.6 years, with underlying land leases averaging 26.4 years by gross floor area (GFA).
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The total distribution amount declared stood at $32.2. million, 5.4% higher y-o-y. The amount is about 90.4% of the REIT’s distributable income to its unitholders, per its distribution policy. According to the REIT manager, it kept 10% of its distributable income for FY2023 for “prudent capital management” for costs incurred and to be incurred in connection with the internalisation of the manager.
As at 31 Dec, 2024, aggregate leverage was 37.4% with a weighted average debt maturity at 2.9 years. In comparison, aggregate leverage was 34.3% with a weighted average debt maturity at 2.9 years as at 31 Dec, 2023.
Sabana REIT’s interest coverage ratio was 3.0 times as at 31 Dec, 2024.
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“We achieved multiyear highs for gross rental income, NPI and DPU for FY2024 if we were to add back the approximately 10% that was being retained for internalisation expenses,” says Donald Han, CEO of the manager.
“Throughout the last four years, our attentiveness to rental renewal rates resulted in our rental reversion reaching a four-year high gear, attaining one of the best track records amongst industrial S-REITs,” he adds.
“Despite the uncertainties that the internalisation process brought along, we pressed on to safeguard the financial prudence of the REIT to maintain the foundation for stability,” says Han.
Sabana REIT expects the current FY2025 to be challenging due to rising costs and prospects of interest rates held at elevated levels.
Additionally, with internalisation of the REIT management function ongoing, it expects to incur additional costs.
Units in Sabana Industrial REIT closed 0.5 cents higher or 1.35% up at 37.5 cents on Jan 21.
