Sabana REIT: 4Q 2011 results.

A DPU of 2.17c has been announced. This is a little lesser than my estimate of 2.2c. This is probably due to the fact that no rentals were collected for the property of 1 Tuas Avenue 4 in the months of November and December 2011. The manager is in advanced stage of negotiation with a party to rent the said property for a 10 year period. This, when completed, together with recent acquisitions should boost income and result in a higher DPU.

1, Tuas Avenue 4.

NAV per unit: $1.05.
Gearing: 34.1%.
Interest cover ratio: 7.4x
Average land lease expiry: 40.2 years.
(10.4% of the REIT's land leases will expire between 2032 and 2036 while 7.3% will expire between 2037 and 2041.)

Sabana REIT managed to secure lower cost of funding for its newer loans at between 3.4% to 3.9% compared to 4.8% previously. The savings will result in higher distributable income, everything else remaining equal.

The REIT will go XD on 30 Jan and income distribution is payable on 29 Feb.

Technically, I see resistance at 91c. We could see gap filling at 91.5c if resistance should be taken out. Stochastics has risen into overbought territory once more which simply suggests to me that there could be a better time to add to long positions. For anyone looking to reduce exposure to the REIT for any reason, this could be a good opportunity.

See presentation slides: here.

AIMS AMP Capital Industrial REIT: 3Q FY2012.

AIMS AMP Capital Industrial REIT delivered a solid set of results with DPU at 2.6c. This is a 4% increase over the previous quarter.

As I was expecting a DPU of 2.5c with a possibility of a small reduction, this is good news indeed. It will go XD on 3 Feb and is payable on 20 Mar.

Upon completion of sale of 31 Admiralty Road for $16.438m, the REIT's gearing would drop to 29.4%. The REIT had purchased this building for $13.4m. So, the REIT will recognise a gain and have gearing comfortably under 30% at the same time.

NAV per unit: $1.367
Interest cover ratio: 5.6x
Occupancy: 98.9%
Average land lease expiry: 41.9 years
(Only 10.9% of nett lettable area will see land lease expiry within the next 21 to 30 years).

The REIT has no debt due until October 2013.

Expectations for very slow growth in 2012 is unlikely to be too challenging as REITs are generally able to weather zero growth environments. The REIT also collects an average of 8.4 months in security deposits per property.

At the recent high of $1.00 per unit, its annualised distribution yield is 10.4%. This could increase in 2013, everything remaining equal.

I am confident of the REIT as a strong passive income generator and it remains a core component of my portfolio.

See presentation slides: here.

Related post:
AIMS AMP Capital Industrial REIT: Partial divestment.