Sabana Industrial Real Estate Investment Trust Financial Analysis
Company Overview
Sabana Industrial Real Estate Investment Trust (the “Trust”) is a Singapore-domiciled unit trust constituted pursuant to a trust deed dated 29 October 2010. The Trust’s core business operations involve investing in income-producing real estate used for industrial purposes in Asia, as well as real estate-related assets.
Business Description
The Trust’s principal activity is to invest in industrial properties in Singapore, with a focus on high-tech industrial, chemical warehouse & logistics, and general industrial properties. The Trust has a portfolio of 21 properties located in Singapore, with a total carrying value of $994,540,000 as at 31 March 2025.
Industry Position and Competitors
The Trust operates in the real estate investment trust (REIT) industry, which is highly competitive. The Trust’s competitors include other REITs listed on the Singapore Exchange Securities Trading Limited (SGX-ST).
Revenue Streams and Customer Base
The Trust’s revenue streams come from rental income generated from its portfolio of industrial properties. The Trust’s customer base consists of tenants who lease the properties for industrial purposes.
Financial Analysis
Income Statement
The Trust’s total return for the period before tax and distribution increased by 68.3% to $7,429,000 compared to $4,415,000 in the corresponding period of the preceding financial year. The increase is mainly attributed to higher gross revenue and lower overall property expenses.
Balance Sheet
The Trust’s net assets decreased by 1.7% to $555,220,000 as at 31 March 2025 compared to $564,900,000 as at 31 December 2024.
Cash Flow Statement
The Trust’s net cash used in/from financing activities was $(15,248,000) compared to $1,727,000 in the corresponding period of the preceding financial year.
Key Financial Highlights
Net Property Income: $16,042,000 (1Q 2025) vs $13,146,000 (1Q 2024), increase of 22.0%
Distribution per Unit (DPU): 0.86 cents (1Q 2025) vs 0.68 cents (1Q 2024), increase of 26.5%
Net Asset Value (NAV) per unit: $0.49 (31 March 2025) vs $0.50 (31 December 2024)
Dividend and Earnings
The Trust declared a distribution of 0.86 cents per unit for the period 1 January 2025 to 31 March 2025.
Recommendation
Based on the analysis of the financial report, we recommend that investors HOLD the stock. The Trust’s financial performance improved in 1Q 2025, with a 22.0% increase in net property income and a 26.5% increase in distribution per unit. However, the Trust’s net current liabilities position and the material uncertainty related to the internalisation exercise may pose risks to investors.
Disclaimer
This recommendation is based solely on the information provided in the financial report and should not be considered as investment advice. Investors should conduct their own research and consult with financial advisors before making any investment decisions.
Date of Report: 15 April 2025
Financial Year: 2025
Net Profit Growth/Decline: The Trust’s total return for the period before tax and distribution increased by 68.3% to $7,429,000 compared to $4,415,000 in the corresponding period of the preceding financial year.
Special Activity or Action
The Trust is currently undertaking an internalisation exercise, which may have potential financial implications on the Trust’s operations and financial performance.
In conclusion, Sabana Industrial Real Estate Investment Trust seems to have a stable performance in 1Q 2025. However, investors should take note of the risks associated with the internalisation exercise and the Trust’s net current liabilities position.
Recommendations for current holders: HOLD
Recommendations for potential investors: BUY with caution.
The recommendation is based on the information available in the report and may not reflect the current market situation. Investors should do their due diligence before making any investment decisions.
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