SABANA Shari’ah Compliant Industrial REIT FY 2019 and 4Q 2019 Financial Results Presentation 23 January 2020, Thursday
Important Notice Disclaimer This presentation shall be read in conjunction with the financial information of Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (“Sabana REIT” or the “REIT”) for the fourth quarter from 1 October 2019 to 31 December 2019 (“4Q 2019”) and full year from 1 January 2019 to 31 December 2019 (“FY 2019”). This presentation may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income, changes in operating expenses, including employee wages, benefits and training, property expenses and governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward-looking statements, which are based on current view of management on future events. Any discrepancies in the tables included in this presentation between the listed amounts and total thereof are due to rounding. 2
Agenda 01 Results Review: Key Highlights for FY 2019 and 4Q 2019 02 Results Review: Financial Performance and Capital Management 03 Results Review: Portfolio Performance 04 Outlook and Key Takeaways 05 Appendix: Distribution Details 3
FY 2019 Financial Highlights For the financial year ended 31 December 2019 DPU DPU DPU DPU Amount for Net Property Gross DPU Distribution Income Revenue (Cents) (S$) (S$) (S$) 51.61m 30.74m 2.92 76.34m FY 2018: S$80.96m FY 2018: S$52.79m FY 2018: S$33.39m FY 2018: 3.18 cents Summary � Delivered Phase 1 of Refreshed Strategy with divestments of non-performing and mature assets; Proactive management and optimisation of portfolio: Divested 9 Tai Seng Drive, with proceeds deployed to pay down borrowings o Secured three new major tenants at New Tech Park and 2 Toh Tuck Link o Renewed master lease for 33 and 35 Penjuru Lane and secured new master tenant for 18 Gul Drive. o In advanced negotiations with potential anchor tenant to take up more than 50% of the space at 3A Joo Koon Circle o � Continued progress with Phase 2 of Refreshed Strategy to undertake Asset Enhancement Initiatives (“AEIs”): Obtained building plan approval for New Tech Park and on track to completing Phase 1 of AEI by 2Q 2020 o Submitted application for planning approval for Phase 2 of AEI at New Tech Park o 4 Completed refurbishment works at 21 Joo Koon Crescent and ongoing works at 10 Changi South Street 2 o
4Q 2019 Financial Highlights For the quarter ended 31 December 2019 DPU DPU DPU DPU Amount for Net Property Gross DPU Distribution Income Revenue (Cents) (S$) (S$) (S$) 13.01m 8.08m 0.77 19.44m 4Q 2018: S$20.02m 4Q 2018: S$13.00m 4Q 2018: S$7.44m 4Q 2018: 0.71 cents Summary � Continued progress with Phase 2 of Refreshed Strategy to undertake AEIs: Obtained building plan approval for New Tech Park and on track to completing Phase 1 of AEI by 2Q 2020 o Submitted application for planning approval for Phase 2 of AEI at New Tech Park o Completed refurbishment works at 21 Joo Koon Crescent and ongoing works at 10 Changi South Street 2 o � Proactive management and optimisation of portfolio: In advanced negotiations with potential anchor tenant to take up more than 50% of the space at 3A Joo Koon Circle o 5
Above average returns among industrial REITs in 2019 26.0% Industrial REITs Total returns in 2019 Mapletree Logistics 46% Mapletree Industrial 44% Frasers Logistics and Industrial Trust 28% Sabana REIT’s Sabana REIT 26% total returns in 2019 Ascendas REIT 24% EC World REIT 17% AIMS APAC REIT 16% 9.4% ESR-REIT 12% Cache Logistics Trust 11% STI’s Soilbuild Business Space REIT -3% total returns in 2019 Source: “Significant Milestones for S-REITs in 2019”. SGX website. 6 January 2020. 6
AEI to drive long-term growth progressing as planned New Tech Park represents approx. one third of portfolio value New Tech Park at present Phase 1 and Phase 2 of AEI - add up to approximately 3,243 sqm (34,906 sq ft) and 532.42 sqm (5,731 sq ft) of space for commercial use � Obtained building plan approval and on target to achieving Phase 1 TOP by 2Q 2020 � Submitted application for planning approval for Phase 2 of AEI 7
Enhancing our assets to drive long-term growth Completed refurbishment works at 21 Joo Koon Crescent Before refurbishment After refurbishment 8
Enhancing our assets to drive long-term growth Ongoing refurbishment works at 10 Changi South Street 2 Before refurbishment After refurbishment Lobby Area Artist’s Impression 9
Agenda 01 Results Review: Key Highlights for FY 2019 and 4Q 2019 02 Results Review: Financial Performance and Capital Management 03 Results Review: Portfolio Performance 04 Outlook and Key Takeaways 05 Appendix: Distribution Details 10
4Q 2019 Financial Performance (YoY) For the quarter ended 31 December 2019 Variance (in S$'000) 4Q 2019 4Q 2018 DPU increased: (%) - mainly due to the additional distribution of the remainder 5.5% distributable income amounting to S$0.5 million (DPU: 0.05 Gross revenue 19,444 20,023 (2.9) cents) withheld during 3Q 2019 distribution. NPI remained stable: Net property income (“ NPI ”) 13,006 13,001 - - contributions from new master lease at 21 Joo Koon Crescent which commenced in November 2019 and higher contribution Total distribution amount declared to from 508 Chai Chee Lane, 23 Serangoon North Avenue 5, 8 8,080 7,436 8.7 Unitholders Commonwealth Lane and 2 Toh Tuck Link due to improved occupancies; - partially offset by lower contribution from 3A Joo Koon Circle which master lease expired in 4Q 2019 and certain properties Distribution per unit (“ DPU ”) (cents) 0.77 0.71 8.5 due to lower average occupancy in 4Q 2019. 11
FY 2019 Financial Performance For the financial year ended 31 December 2019 DPU decreased on: Variance (in S$'000) FY 2019 FY 2018 (%) - weaker NPI performance of the portfolio amid master lease expires, lower occupancy at some properties and property divestment of 9 Tai Seng Drive; Gross revenue 76,338 80,961 (5.7) - partially offset by lower profit expense after the repayment of Trust Certificates in April 2019 and capital gains distribution of approximately S$1.24 million in 1Q 2019. Net property income (“ NPI ”) 51,612 52,790 (2.2) Total distribution amount declared to NPI decreased on: 30,743 33,391 (7.9) Unitholders - lower contribution from divestment of 9 Tai Seng Drive in 1Q (11.7) - from operations 29,500 33,391 2019 and 3A Joo Koon Circle which master lease expired in 4Q 1,243 (1) - from capital gains - n.m 2019; - absence of one-time recovery of revenue in 1Q 2018 from the Distribution per unit (“ DPU ”) (cents) 2.92 3.18 (8.2) ex-master tenant of 6 Woodlands Loop; and - lower contribution from 21 Joo Koon Crescent due to expiry of (11.9) - from operations 2.80 3.18 previous master lease in 3Q 2018. The new master lease 0.12 (1) - from capital gains - n.m commenced in November 2019; - partially offset by one-off recovery of revenue relating to prior n.m denotes “not meaningful” usage of common area from tenants of 151 Lorong Chuan and 2 Toh Tuck Link in 3Q 2019. (1) Includes distribution of approximately S$1.24 million of capital gains arising from the divestment of properties from prior periods, in 1Q 2019 only. 12
Balance Sheet As at As at (S$’000) 31 Dec 2019 31 Dec 2018 - Increase in investment properties due to: (i) the adoption of FRS 116 Leases on 1 January 2019 Investment properties 869,200 949,241 which the Group had recognised Right-of-Use (“ROU”) assets on their existing land leases with JTC, alongside Investment properties held for divestment 110,550 14,888 the corresponding lease liabilities; and Other assets 7,518 9,659 (ii) valuation gains mainly from 151 Lorong Chuan due Total assets 989,409 971,647 to its improved occupancy as at 31 December 2019. Borrowings, at amortised cost 361,709 275,184 - Decrease in investment properties held for divestment due to divestment of 9 Tai Seng Drive in January 2019. Other liabilities 23,222 101,448 Total liabilities 384,931 376,632 - Decrease in borrowings mainly due to the repayment of the S$100.0 million Trust Certificates Series in April 2019, largely Net assets attributable to Unitholders 595,015 604,478 from the divestment proceeds from the divestment of 9 Tai Seng Drive, partially offset by the net drawdown of S$13.5 Units in issue (units) 1,053,083,530 1,053,083,530 million revolving facilities. NAV per unit (S$) 0.57 0.57 13
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