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Friday, October 26, 2018 – 6:32 pm
A decline in rental income due to lower occupancy rates and negative rent reversals for certain previously signed major leases weighed on the results of industrial leasing Sabana Reit in the third quarter.
The distribution per unit plunged to 0.77 cent Singapore, against 0.79 percent a year ago, said Friday the group. This came as third-quarter revenues available for distribution fell 3.2% to 8.1 million Singapore dollars from the previous year.
For the three months ended September 30, gross revenues decreased by 4.8% to settle at S $ 19.9 million compared to the same period of the previous year, mainly due to the decline in the contribution of certain multi-tenant properties due to a decrease in the number of occupants in the current period and negative revaluations for certain major leases renewed in the fourth quarter of 2017; and The contribution of its assets located at 1 Tuas Avenue 4 following the surrender of the lease in the first quarter of 2018, among other reasons.
Net property income decreased 5.7% to $ 12.6 million from the previous year.
Overall, the occupancy rate of Reit was 81.4% at the end of September 2018, compared with 84.5% at the end of June 2018, which corresponds to vacancies at 21 Joo Koon. Crescent, 9 Tai Seng Drive and 1 Tuas Avenue 4. the last two of which are awaiting the completion of the divestment.
"If the divestment of these two properties had been completed by September 30, 2018, the occupancy rate would have been 85.1%," said the head of Reit.
In addition, the Trustee of Reit has also entered into principal leases with the Freight Links Express logistics center for 51 Penjuru Road, the Freight Links Express logistics park for 33 and 35 Penjuru Lane, as well as with Crystal Freight Services Distripark. for 18 Gul Drive.
This follows an exercise in the option of major tenants to renew their existing main leases. The three main tenants are subsidiaries of Vibrant Group, which is also the sponsor of Reit and the controlling shareholder of the manager.
The overall transaction value of the main leases is about 11.53 million Singapore dollars.
Without providing a breakdown for each of the three properties, the manager stated: "After reviewing market conditions, Singapore's economic performance and property characteristics, as well as the independent market report (from Suntec Real Estate Consultants), the Manager the agreed rental price for each property is the market rents for similar properties located in similar locations, and the conclusion of capital leases will generate consistent, predictable and stable revenues and revenues for Sabana Reit. "The Sabana Reit units finished flat at $ 0.415 Singapore on Friday.
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