Sabana Industrial REIT's third-quarter distributable income per unit surged by 38% | Lianhe Zaobao

Driven by rising rents and increased occupancy rates, Sabana Industrial REIT reported a year-on-year surge of 38.4% in distributable income per unit for the third quarter, reaching 1.01 cents, marking the highest record since the first quarter of 2018. Sabana Industrial REIT stated after the market closed on Wednesday (October 22) that total revenue for the third quarter increased by 5.3% year-on-year to SGD 29.9 million, driven by higher occupancy rates and rental increases across multiple properties. The overall portfolio occupancy rate of the trust rose from 85.7% at the end of June to 87.0% at the end of September. Net property income for the trust in the third quarter increased by 16.0% year-on-year to SGD 16.9 million, while distributable income surged by 38.2% year-on-year to SGD 11.3 million. The management company specifically noted that the rental increase rate of 11.3% in the third quarter is the 19th consecutive quarter of positive rental growth for the trust since the first quarter of 2021. In the first nine months of this year, the trust's distributable income per unit increased by 30.3% year-on-year to 2.88 cents, total revenue rose by 6.8% to SGD 89.3 million, net property income increased by 20.8% to SGD 50.4 million, and distributable income surged by 30.6% to SGD 32.4 million. Further Reading Sabana Industrial REIT shareholders do not support the initiation of a price discovery process Sabana Industrial REIT's distribution per unit in the second half of 2024 rises sharply by 32.2% The trust expects to achieve double-digit growth in distributable income per unit for the fiscal year 2025, with both total revenue and net property income projected to grow. The trust is prepared to maintain its growth trajectory. On the other hand, the auditor emphasized that the ability of the group and the trust to continue operating normally hinges on whether it can successfully apply for an extension or refinancing of bank loans. The group currently has a SGD 75 million loan maturing in March 2026, and if the internalization of management (switching to an internal management company) triggers a reassessment of the existing unsecured loan arrangements by the bank, and both parties cannot reach an agreement, Banks may force the group to immediately repay loans and interest. In addition, the group's and the trust's current liabilities exceed current assets by RMB 77.6 million and RMB 77.5 million, respectively. The auditors stated that these factors indicate significant uncertainty, which may severely impact the group's and the trust's ability to continue normal operations. When releasing performance results, the management company pointed out that it has engaged with banks to seek an extension for the loan due in March 2026. The banks are still reviewing the loan extension repayment matter. The internalization of trust management has so far incurred a cumulative expense of RMB 12.8 million, of which RMB 7.19 million has been paid using retained earnings. The management company believes that, for prudent capital management, the trust will continue to retain 10% of its earnings to cover the expenses of management internalization. Sabana Industrial REIT's stock price remained flat at RMB 0.43 on Wednesday