SINGAPORE (Jan 25): The manager of Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (Sabana REIT) on Thursday announced the appointment of Donald Han and Tan Cheong Hin as its new CEO and a new independent director, respectively.
Han is a real estate veteran and succeeds Aw Wei Been, who has been serving as acting CEO following the departure of Kevin Xayaraj at the end of 2017.
See: Sabana REIT manager CEO Xayaraj steps down; acquisition of 47 Changi South Ave 2 aborted
Meanwhile, Tan, who also joins as a member of the audit committee, is a qualified Chartered Financial Analyst (CFA) and joins a board of three other independent directors and an audit committee of two other independent directors, where the chairman of the board & audit committee are both independent directors.
The manager says its key appointments follow its earlier commitment to a recalibrated strategy, and marks the end of the strategic review that was undertaken in response to feedback from unitholders in February 2017.
See: Here are the responses our questions drew at Sabana REIT’s EGM
Additionally, Sabana REIT’s manager has declared a 4Q17 distribution per unit (DPU) of 0.83 cent, 5.7% down from 0.88 cent a year ago after the manager received 100% of its fees fully in cash for the quarter.
Had the manager continued to receive 80% of its base fee in units under its general mandate for 2017, the DPU for 4Q would have been 0.92 cent.
Revenue for the quarter fell 9.5% on-year due to the absence of contributions from 1 Tuas Avenue 4 and 6 Woodlands Loop, as well as lower revenue contribution from some of the other properties in the trust’s portfolio.
Net property income (NPI) however declined just 1.3%, with the lower gross revenue being partially offset by a 22.7% reduction in property expenses from proactive lease and property management by the manager.
Net finance costs fell 29.8% as the trust utilized its net proceeds from the rights issue and divestment of 218 Pandan Loop to pay down borrowings, and redeeming higher cost convertible sukuk with lower cost facilities.
As at end 2017, overall occupancy levels were at 85.4% with 93,358 sq ft of renewals secured over the quarter.
The latest set of results brings the trust’s DPU for the full year to 3.31 cents, down 20.6% from 4.17 cents in FY16.
Looking ahead, Sabana REIT’s manager says it continues to expect the general industrial market to remain challenging, with prices and rentals continuing their moderation in the face of increased supply. The manager says it is also in advanced discussions with a prospective buyer for 6 Woodlands Loop and targets to complete the divestment by 1H18.
Units in Sabana REIT closed unchanged at 41.5 cents.
