THE
BUSINESS
OF
Focus
Mr Steven Lim Kok Hoong
Chairman and Independent
Non-Executive Director
Mr Kevin Xayaraj
Co-founder, Chief Executive
Officer and Executive Director
LETTER TO UNITHOLDERS
Dear Unitholders:
We are pleased to report that Sabana Shari’ah
Compliant Industrial Real Estate Investment
Trust (“Sabana REIT” or the “Trust”) delivered
a fair performance in FY 2014, despite
challenging market conditions. Gross revenue
increased for the fourth consecutive year since our
listing, attesting to our ability to grow our business.
Nonetheless, Sabana REIT has,
since November 2013, been
going through the first wave of
master lease expiry/renewal cycle
since its listing. This impacted
our performance slightly for the
short-term. Amidst this challenging
operating environment, net property
income (“NPI”) and distribution in
FY 2014 declined against the solid
performance achieved in the first
three years of listing.
That said, we are very clear about
the challenges before us and we
are focused on strengthening our resilience to drive
long-term growth by building on our fundamentals,
strategically expanding our portfolio and dynamically
enhancing our capital structure. We believe the
measures we implemented in FY 2014 will pave
the way for our next phase of growth.
A TRANSITION YEAR
For the year under review, Sabana REIT registered
growth of S$10.9 million in its gross revenue,
a 12.1% increase from S$89.5 million in FY 2013.
Despite this, NPI for FY 2014 declined by 9.2%
against FY 2013 owing to an increase in property
expenses arising from higher land rent, property tax
and maintenance expenses, which were previously
borne by the master tenants. Additionally, NPI
was also affected by temporary
vacancies that occurred during
the conversion of master-leased
properties to multi-tenanted
properties.
The lower NPI adversely impacted
the distributable income for
FY 2014. Higher straight-lining
adjustments arising from rent‐free
periods given to new tenants
and new borrowings to fund a
new acquisition caused a further
decline in distributable income.
In FY 2014, Sabana REIT
generated distributable income of
S$51.6 million, down 16.4% compared to FY 2013.
Consequently, distribution per unit (“DPU”) declined
21.9% from 9.38 Singapore cents in FY 2013 to
7.33 Singapore cents for the year under review.
SABANA REIT
REGISTERED AN
ANNUAL GROWTH
OF S$10.9 MILLION
IN ITS GROSS
REVENUE, A 12.1%
INCREASE FROM
S$89.5 MILLION IN
FY 2013.
SABANA REIT
|
ANNUAL REPORT 2014
1
