There are 38 real estate investment trusts (REITs) in Singapore’s stock market. The REIT with the worst performance over the last 12 months is Sabana Shariah Compliant REIT (SGX: M1GU), whose units have fallen by 49% in price to S$0.36 currently. Sabana REIT is unique for being the world’s first Shariah-compliant REIT. In the third quarter of 2016 Sabana saw its gross revenue decline by 9.7% to S$23.0 million while its net property income shrank by 24% to S$13.9 million. Although the REIT’s portfolio occupancy rate managed to step up from 88.8% in the second quarter of 2016 to 89.2%, the number is still lower than the 91.7% seen a year ago. Market researcher Knight Frank projected a decline in industrial rents in Singapore of 6% to 8% in the fourth quarter of 2016. Put another way, Sabana REIT’s business environment is in a condition of low demand and oversupply.
Sabana Shariah Compliant REIT released its fiscal third-quarter earnings yesterday. The REIT’s portfolio currently consists of 21 industrial properties in Singapore. Gross revenue was S$23.0 million in the reporting quarter, down 9.7% compared to the previous year. Net property income declined 24% to S$13.9 million during the same period, mainly due to higher operating expenses. As a result, the REIT’s distribution per unit for the quarter also tumbled by 32.2% to 1.20 cents based on a unit count of 739.8 million units. At the end of the reporting quarter, the REIT had a net asset value per unit of S$0.81, down 23.6% from the S$1.06 seen a year ago. According to manager Kevin Xayaraj, industrial rents are expected to be under pressure with the onset of the softening demand and high supply of industrial space in the market. Market conditions are exptected to remain challenging.
Sabana Shariah Compliant REIT is the world’s first real estate investment trust that has adopted the standard of Shari’ah compliance. Sabana REIT currently has a portfolio of 21 industrial buildings that are all found in Singapore. Most of the properties are also located in close proximity to the principal industrial zones in the island, such as Penjuru and Tai Seng. For perspective, the SPDR STI ETF, an exchange-traded fund that mimics the fundamentals of the Straits Times Index, has a yield of 3.2%. In its latest quarterly earnings report Sabana REIT reported a 10.9% year-on-year decline in gross revenue and a 31.1% decline in income available for distribution.
Sabana Shariah Compliant REIT (SGX: M1GU) had released its fiscal first-quarter earnings yesterday evening. The real estate investment trust is sponsored by the small conglomerate Vibrant Group Ltd (SGX: F01). Currently, Sabana REIT owns a portfolio of 23 properties in Singapore, with assets worth a collective S$1.3 billion. Sabana REIT had achieved revenue of S$25.4 million in its fiscal first-quarter (three months ended 31 March 2015), a slight 3.2% year-on-year increase. However, its net property income only managed to grow by 1.1% from a year ago to S$18.6 million as a result of much higher property expenses. Besides, Sabana REIT’s net asset value per unit has decreased slightly to S$1.06 as at 31 March 2015 from S$1.09 a year ago.
Sabana Shariah Compliant REIT (SGX: M1GU) has released its full-year earnings for 2014 recently. The REIT focuses on industrial properties scattered around Singapore which are collectively worth around S$1.26 billion as at 31 December 2014. Despite seeing gross revenue for the whole of 2014 grow by 12.1% to S$100.3 million from a year ago, the trust’s net property income (NPI) actually declined by 9.2% to S$72.95 million. The decline was partly due to a huge 200% increase in property expenses for the trust. Income available for distribution to Sabana REIT’s unitholders followed suit with a 16.4% drop to S$51.6 million.