Sabana Industrial REIT

Sabana Industrial REIT: 1Q2013 NPI increased 9.5% y/y to $20.3m, mainly due to the full contributions of 23 Serangoon North Avenue 5, after the acquisition in 4Q2012. As a result, DPU increased 6.6% to 2.41¢- implied annualized yield of 7.5%. Portfolio occupancy stood at 99.9%. Mgmt remains focused on growing the REIT's portfolio with an eye on optimizing its capital structure (current gearing at 36.6%). Group currently has 21 properties, with a total asset value of $1.2b. Going forward, despite the 2013 economic growth forecast of 1-3% by MTI, Knight Frank forecasts price appreciation at 5% to 10% for the whole of 2013 for industrial properties of better tenures, good locations and superior specifications in view of the Seller’s Stamp Duty recently introduced by the government. Street is NEUTRAL on the counter, consensus TP of $1.25. Counter currently trading at 1.2x P/B, historical yield of 7.2%.