Financial Analysis Report: Sabana Industrial REIT (Net Profit Growth: 22.0%)
Date of Report: 15 April 2025 Financial Year: 1Q 2025
Business Description Sabana Industrial REIT is a real estate investment trust that focuses on industrial properties in Singapore. The company’s core business operations include owning, managing, and leasing industrial properties, with a portfolio that includes high-tech industrial, chemical warehouse, logistics, warehouse, and general industrial properties [[Page 2]].
Industry Position and Competitors The company operates in the industrial REIT sector, which is subject to economic uncertainties and disruptions in global trade. Sabana Industrial REIT’s performance is expected to be challenged by unprecedented economic uncertainties arising from the disruptions in global trade and significant cost pressures from the potential imposition of US tariffs [[Page 26]].
Revenue Streams and Customer Base The company’s revenue streams come from leasing industrial properties to tenants from diversified trade sectors. The customer base includes tenants from various industries, with a focus on cost-conscious tenants [[Page 26]].
Financial Highlights
Gross Revenue: $29.1 million, up 4.6% year-on-year (y-o-y) [[Page 6]]
Net Property Income (NPI): $16.0 million, up 22.0% y-o-y [[Page 6]]
Income Available for Distribution per Unit: 0.86 cents, up 26.5% y-o-y [[Page 6]]
Dividend: No dividend information is provided in the report.
Financial Statement Analysis
Income Statement: The company’s gross revenue increased by 4.6% y-o-y, driven by higher occupancy at the majority of its multi-tenanted portfolio and strong rental reversions [[Page 6]].
Balance Sheet: The company’s aggregate leverage is at 37.8%, with a weighted average debt maturity of 2.7 years [[Page 20]].
Cash Flow Statement: No information is provided in the report.
Key Findings and Risks
Strengths:
Sustained positive rental reversions since 1Q 2021 [[Page 23]]
High tenant retention rate of 99.7% in 1Q 2025 [[Page 7]]
Increasing portfolio occupancy rate [[Page 7]]
Risks:
Economic uncertainties arising from disruptions in global trade and potential imposition of US tariffs [[Page 26]]
Potential impact of internalisation process on the company’s operations [[Page 8]]
Special Activity or Action The company is taking steps to improve profitability, including:
Implementing solar initiatives to reduce operational costs [[Page 15]]
Engaging tenants 12 months ahead of lease expiries to attract new tenants [[Page 26]]
Recommendation
For current investors: Hold the stock, as the company has demonstrated sustained positive rental reversions and increasing portfolio occupancy rate.
For potential investors: Buy the stock, as the company has a strong track record of rental reversions and a diversified tenant base. However, investors should be cautious of the economic uncertainties and potential risks associated with the internalisation process.
Disclaimer: This recommendation is based on the analysis of the provided 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.
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