Sabana REIT announces DPU of 1.86 cents for 2Q ended June

Sabana Real Estate Investment Management, the manager of Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (Sabana REIT) has announced a DPU of 1.86 cents for the quarter from 1 April 2014 to 30 June 2014.

This is largely unchanged compared to the 1.88 cents quarterly DPU achieved in 1Q 2014 despite an increase in unit base by approximately 2.7 million as a result of new units issued in 2Q 2014 pursuant to the distribution re‐investment plan (DRP) established on 1 April 2014.

Kevin Xayaraj, Chief Executive Officer and Executive Director of the Manager, attributed the stable results to successful marketing and leasing efforts in 2Q 2014. Xayaraj says: “During the quarter, our team successfully secured six new leases and 12 lease renewals. Portfolio occupancy remained largely unchanged at 90.8% in 2Q 2014 as compared to 90.6% in 1Q2014. Looking ahead, the market conditions are expected to remain challenging. We will continue to intensify our marketing and leasing efforts to improve our portfolio occupancy. We will also continue to make selective acquisitions. In addition, we will look for opportunities to recycle our capital by divesting underperforming assets.”

As at 30 June 2014, Sabana REIT’s portfolio consisted of 22 properties, with 4.5 million square feet of gross floor area, leased to a diversified base 151 tenants. The portfolio’s weighted average lease term for underlying land in terms of gross floor area was 38.4 years. The largest allocation in terms of net lettable area was in the high‐tech industrial sector – approximately 46.0%.

On 11 June 2014, Sabana REIT received affirmation from Standard & Poor’s Rating Services (S&P) of its ‘BBB‐’ long‐term corporate credit rating and ‘axA‐‘ long term ASEAN regional scale rating with a stable outlook.

As at 30 June 2014, Sabana REIT had outstanding borrowings of $455.8 million, of which 91.0% was effectively fixed. Sabana REIT’s total weighted average tenor of debt stood at 2.5 years, with only S$10.2 million due for refinancing in November 2014.

The DRP will be applied to 2Q 2014 distribution. Unitholders may elect to receive distributions for the period from 1 April 2014 to 30 June 2014 in the form of units, instead of cash.