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SABANA SHARI’AH COMPLIANT REIT
12
Profit Rate Risk Management
In line with its objective to provide regular and stable
distributions to its Unitholders, the Manager hedged
Sabana Shari’ah Compliant REIT’s profit rate exposure
on S$352.8 million, which is equivalent to 96.7% of
total outstanding credit facilities, via individual profit rate
swaps for the entire tenor of the three Term Commodity
Facilities. As part of its plan to spread out maturity
dates of its credit facilities and to diversify future funding
sources, the Manager will be exploring, amongst others,
the establishment of Shari’ah Compliant Medium Term
Note (MTN) Programme and Convertible Bonds in 2012
and beyond.
Comfortable Debt Headroom
Sabana Shari’ah Compliant REIT’s aggregate leverage
was 34.1% at the end of 2011, well within the aggregate
leverage limit of 60%
(3)
as set out in Appendix 6 of the
Property Funds Appendix of the Code on Collective
Investment Schemes (“CIS Code”) issued by the MAS.
Based on a target aggregate leverage limit of up to 40%,
the Trust still had sufficient debt headroom and financial
flexibility to pursue more yield-accretive acquisitions
after 31 December 2011.
Debt Profile as at 31 December 2011
Debt maturity profile
(S$ million)
Initial Portfolio Revalued Upwards
As of 30 September 2011, the initial portfolio of
15 properties was revalued upwards, resulting in
revaluation gains of S$50.1 million, or an appreciation of
5.9% from the S$851.2 million at the time of the listing.
The revaluation gains demonstrates the Manager’s
ability to secure high quality assets at attractive prices.
The regulatory annual revaluat ion exercise was
independently conducted by DTZ Debenham Tie Leung
(SEA) Pte Ltd
(4)
.
2011
2012
2013
2014
12.0
252.5
100.3
Valuation by Asset Class
(5)
Asset Classification
30 September 2011
(S$m)
30 September 2010
(S$m)
High-tech Industrial
534.5
498.7
Chemical Warehouse &
Logistics
146.5
141.0
Warehouse & Logistics
170.2
163.0
General Industrial
50.1
48.5
Total Asset Value
901.3
851.2
Significant Progress in Portfolio
Build-up Since IPO
Since listing, the Manager continued to actively pursue
acquisition opportunities. By the second half of 2011,
Sabana Shari’ah Compliant REIT was able to conclude
transactions of five new yield-accretive properties of
about S$147.5 million. The five new acquisitions, namely
the properties at 21 Joo Koon Crescent, 3A Joo Koon
Circle, 2 Toh Tuck Link, 39 Ubi Road 1 and 6 Woodlands
Loop, brought the total number of properties in Sabana
Shari’ah Compliant REIT portfolio from 15 to 20, which
equates to a total asset value of more than S$1.0 billion.
Improved Diversification: Asset Type,
Lease Structure & Customer Base
Sabana Shari’ah Compl iant REIT’s portfol io saw
improved diversification in various areas in 2011 which,
was largely attributed to the acquisitions made in 2011.
With new master leases concluded, the lease expiry
concentration of the Trust’s portfolio in 2013 and 2015
was reduced. As of 31 December 2011, the weighted
average lease term to expiry based on gross revenue of
the portfolio was 2.9 years, while the weighted average
unexpired lease term for underlying land by gross floor
area (“GFA”) was 40.2 years. The new transactions
brought five new quality master tenants into Sabana
Shari’ah Compliant REIT. Together with active leasing
of the portfolio, this brought the total tenants
(6)
within
the Sabana Shari’ah Compliant REIT portfolio to 140,
a significant increase from 101 tenants on the date
of listing.
(3) The aggregate leverage of a property fund may exceed 35% of
the fund’s deposited property only if a credit rating of the Property
fund from Fitch, Moody’s or Standard and Poor’s is obtained and
disclosed to the public.
(4) The valuation was based on Direct Comparison Method,
Capitalization Approach and Discounted Cash Flow Analysis.
(5) Based on 15 properties; excluding the new acquisitions of
6 Woodlands Loop, 39 Ubi Road 1, 3A Joon Koon Circle, 21 Joon
Koon Crescent & 2 Toh Tuck Link.
(6) Includes sub-tenants under master leases and direct tenants of 9
Tai Seng Drive.
Operations & Financial Review
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