Sabana REIT's NPI fell 15.1% to $20.86m in H1

NPI took a hit following a one-time provision for rental waiver.

Sabana REIT's net property income (NPI) slipped 15.5% YoY to $20.86m in H1 2020, the company revealed in a media release. Over the same period, gross revenue declined 6.7% to $34.2m.

The weaker revenue was blamed on lower occupancies at certain properties and the expiry and termination of master leases at 3A Joo Koon Circle (3AJKC) and 10 Changi South Street 2. The NPI was also hit by a one-time provision for rental waiver, and allowances for impairment losses on trade receivables were made for certain tenants across the portfolio out of prudence

Unitholders will receive a DPU of $0.47 for the period, 65.7% lower YoY than that recorded in H1 2019. Amidst uncertainties, the manager decided to temporarily retain 55% of its H1 2020 distributable income to conserve capital, which will be paid out at a later date.

On the other hand, overall occupancy levels improved to 77.3% as at 30 June, from 75.4% as at 31 December 2019. This followed the higher occupancy at 15 Jalan Kilang Barat and the securing of a new anchor tenant for approximately 56% of total net lettable space at 3AJKC.

Amidst the challenging backdrop, rental reversion for H1 2020 was a positive 4.4% as the manager engaged with tenants with expiring leases early.