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So, removing this, a more accurate DPU from its business is 2.53c for the quarter.
NAV/unit: $1.469
Gearing: 33.6%
Interest cover ratio: 4.6x
No major refinancing needs till FY2016.
Total Assets: $1.048 billion
Occupancy: 98.5%
Average security deposit per property: 6.8 months
Average land lease expiry: 40.4 years
The management impresses with securing lease renewals from its tenants way ahead of expiries and with positive rental reversions to the tune of 23.5% on average to boot.
Currently, only 6.3% of leases are expiring in FY2013 and only 8.3% of leases are expiring in FY2014. Managing to renew these leases and with a corresponding increase in rental could bump up subsequent DPU.
Of course, the completion of phase 2 in the redevelopment of 20 Gul Way by end of this year and the completion of redevelopment of 103 Defu Lane 10 in the middle of next year will bump up DPU more significantly, everything else remaining constant.
In the near term, expect DPU to improve in the next quarter as income from phase 1 of the redevelopment of 20 Gul Way will be recognised then. I would not be surprised if the unit price of the REIT goes higher as the market takes this into consideration.
The REIT has many more properties with under-utilised plot ratio like 103 Defu Lane 10. Selectively re-developing these plots will lead to higher NAV and NPI over time.
Like I said before, this could be another A-REIT in the making and spells good news for loyal unit holders.
The REIT will go XD on 7 February 2013 and the income distribution will take place on 19 March 2013.
At $1.58 a unit, annualising the adjusted DPU of 2.53c, the distribution yield is 6.4%.
Doing a projection into 2014, however, I expect that this is set to increase, assuming that the unit price remains where it is today.
See presentation slides: here.
Related post:
AIMS AMP Capital Industrial REIT: 103 Defu Lane 10.
Bloggy Award
6 comments:
Super Ang Pow for us.
Wishing Sabana can & will be able to match AIMS' footsteps in forward looking AEI & building investments too.
Hi SnOOpy168,
I am full of confidence in the management. The results speak for themselves. :)
As for Sabana REIT, I guess the jury is still out on this one.
SnOOp
i wish the same....Sabana. :)
AK
Can you elaborate why is the jury out on Sabana?
TIA
Hi JCK,
It is just a figure of speech. It means that we are still waiting for a verdict. :)
Hi AK,
Is a REIT Manager the same as the Corporate Parent of the REIT? The REIT or Trust structure I look up in respective coy websites & SGX website shows only REIT Manager but never the Corporate Parents. Some are obvious, eg Capitaland & Keppel Land wld be Corporate Parents for their REITS but for the others like AIMS, Sabana, Suntec, Starhill etc, where can I find whom their Corporate Parents are?
Btw, reason I pose this query is an article by Goh Eng Yeow in Sunday Times (Feb 4) where he highlighted potential risks of Reits and that it is advisable to stick to Reits with strong corporate parents with the financial means to bolster their Balance Sheets. Thanks very much.
Hi jojo,
Some REITs do not have "corporate parents" or "sponsors". Actually, having one might not always be a good thing.
For example, the recent decision by Keppel Corp to give units in Keppel REIT to its shareholders as dividend in specie is detrimental to existing unit holders of Keppel REIT. I thought of blogging about it but didn't have the inclination to do so.
Sometimes, the corporate parent treat their REITs as vehicles in which to dump their assets, basically forcing their REITs to raise funds to pay the asking prices.
I do not think that having a "corporate parent" or not is a very important factor although it has gained currency with some analysts, post GFC.
What is more important to me is the quality of the REIT's management and how rigorous they have been in maintaining a strong balance sheet and healthy ratios.
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