REIT-TIREMENT - REITs Investing & Personal Finance

REITs investing & personal finance

Wednesday, January 31, 2024

Sabana Industrial REIT's 2H FY23 Review

Basic Profile & Key Statistics

Key Indicators

Performance Highlight
Gross revenue and NPI have improved YoY, primarily driven by positive rental reversions. However, the NPI increase is offset by higher utility costs and a one-off impairment loss related to 33 & 35 Penjuru Lane. Despite the abovementioned and internalization cost, the income available for distribution remains similar, while DPU is lower due to retention.

Rental Reversion
Rental reversion for 2H 2023 is at 14.7%. 

Asset Enhancement Initiative
AEI for 1 Tuas Avenue 4 is on track to be completed by 1H 2024 while Phase 3 AEI for New Tech Park remains in discussion with multi-governmental and statutory boards.

ESG Initiative
The solar PV system at Changi South Street 2 was turned on in December 2023 while turn-on is expected to be in 1Q 2024 for 34 Penjuru Lane, 3A Joo Koon Circle. Solar power generation capacity for 5 properties is targeted to be expanded by 4Q 2024.

Related Parties Shareholding

The shareholdings for sponsor, manager and directors of REIT Manager are relatively low.

Lease Profile

The WALE is relatively short with concentrated lease expiry in 2026. The weighted average land lease expiry is short.

Debt Profile

The overall debt profile falls within the median range, though notably, the positive aspect lies in the 100% unsecured debt.

Diversification Profile

Positive aspects include diversified sector and low top tenant contribution. However, it has a relatively high top property contribution and is not geographically diversified.

Key Financial Metrics

Positive points include competitive management fees, a relatively high operating distributable income on capital and operating distribution proportion. However, the operating distributable income margin is relatively low.

DPU Breakdown
  • TTM Distributable Income Breakdown:
    • 100% from Operation
  • TTM DPU: 92.1% of Distributable Income


  • Uptrend: DPU from Operation, Committed Occupancy, Property Yield, Operating Distributable Income on Capital
  • Slight Uptrend: Adjusted Interest Coverage Ratio
  • Slight Downtrend: NAV per Unit
  • Downtrend: Operating Distributable Income Margin

Relative Valuation

  • Dividend Yield - Average for 1y, 3y & 5y
  • P/NAV - Below - 1SD for 1y & 5y; Below -2SD for 3y

Author's Opinion

In comparison to 1H, there's positive growth in gross revenue and NPI. However, distributable income is lower due to internalization expenses (under "other trust expenses" in the financial statement). For debt, there is no refinancing requirement until 4Q 2025. 

On internalization, the trustee shared a work plan on January 30, but no detail on the timeline provided yet.

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

To support my work, check out:

Patreon - Subscribe and get exclusive content

Investing Note - Support by following my Investing Note profile

X - Support by following my X account

Facebook Page - Support by liking my Facebook Page    

Facebook Group - REIT Investing Community - Join to share and discuss REITs

Telegram Channel - Singapore REITs Post - Join to receive posts for Singapore REITs

Buy Me a Coffee - Treat me a coffee for my efforts

*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.

No comments:

Post a Comment