Monday, July 20, 2015

Sabana REIT

Sabana REIT: 2Q15 DPU fell 3.2% to 1.8¢, while distributable income inched higher by .12% to $13.2m.

Both revenue (+0.2%) and NPI (+0.5%) were flattish at $25.4m and $18.4m respectively. The marginal boost was from 10 Changi South Street 2, acquired in Dec ’14.

Occupancy stood at 90.9% (0.3ppt q/q) with WALE of 2 years. Aggregate leverage stood at 37.9%. Weighted debt tenor stood at 2.5 years with all-in financing costs of 4.2%.

Management expects market conditions to remain challenging and remain vigilant to pursue growth via inorganic means. It also intends to dispose underperforming assets.

On the 11 master-leases expiring in 2015, management is renewing or securing new leases for 8 of them, while the remaining three could likely be converted into multi-tenanted buildings.

Sabana REIT is currently trading at 8.3% annualized 2Q15 yield, and 0.8x P/B

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