Sabana REIT’s 4Q15 net property income crashes 11% to $16.29m

Blame it on weak revenue, negative rent revisions.

Sabana Real Estate Investment Management Trust (Sabana REIT)’s net property income for 4Q15 crashed 11% to about $16.29m, while its FY15 NPI dipped 1.8% to around $71.61m.

According to the company’s press release, the declines are due mainly to lower gross revenue arising from negative rental revisions for certain master leases renewals, and spiked vacancies in the last quarter of 2015. This was coupled with a hike in property costs due to conversion of three more master leases into multi-tenanted leases.

The company also asserted that it struggled with increased property tax and land rent expenses from the conversion of certain master leases from triple-net into non-triple-net tenancies.

Company management expressed that it expects the local economy to remain subdued and market market conditions to continue to be challenging in 2016. However, it said it is doubling down in its efforts to boost portfolio occupancy, rolling out productivity and cost control measures, and managing Sabana REIT’s capital structure.

Further, it will also evaluate potential yield-accretive acquisition opportunities in Singapore and abroad, as well as development projects and asset enhancement initiatives to grow the company’s portfolio.