Latest Earning Season – Three REITs That Delivered Weaker PerformancesRecently

REITs can be suitable for risk-adverse investors because of their more stable earnings qualities.

However, the weak economy has affected many industries such as the oil and gas, shipping, banking and the property sectors. REITs, despite their traditionally stable in income, have not be spared.

In fact, a number of REITs have reported weaker results recently. Here, are three of them.

Sabana Shariah Compliant REIT (SGX: M1GU) is unique for being the world’s first Shariah-compliant REIT. It focusses on industrial properties and currently manages 21 properties in Singapore, across the high-tech industrial, warehouse and logistics, chemical warehouse and logistics, and general industrial sectors.

Sabana ended the reporting quarter with a portfolio occupancy rate of 89.2% and a weighted average lease expiry (WALE) of 2.5 years. This compares with 91.7% and 1.7 years last year.

The REIT said: “Industrial rents are expected to be under pressure with the onset of the softening demand and high supply of industrial space in the market. It also “anticipates market conditions to remain challenging.”

Gross revenue declined 9.7%, while net property income (NPI) dropped 24% compared to the same quarter last year. The distribution per unit (DPU) came in at 1.2 cents, down 32.2% from a year ago. For more information about the latest figures, please click here.

CapitaLand Retail China Trust (SGX: AU8U) focusses on shopping malls in China. It has 11 malls spread across six Chinese cities.

The trust delivered a reasonable performance this quarter. Below are some key snippets.

Overall portfolio occupancy rate come in at 95.2% for the reporting quarter, an increase from the 94.8% a year ago. Despite weaker shopper traffic growth of 1.2% year-on-year, on a quarter-on-quarter basis, it is up by 5.5.

The REIT’s quarterly tenants’ sales climbed by 2.9% and 1.7% on a year-on-year and quarter-on-quarter basis, respectively. The REIT also reported an average positive rental reversion of 4.8% for the reporting quarter.

Despite all that, the weakening of the renminbi against the Singapore dollar by 8.1% over the last 12 months has overshadowed the performances.

In term of numbers, gross revenue declined by 8.5%, while net property income (NPI) dropped 6.9% compared to the same quarter last year. The distribution per unit (DPU) came in at 2.36 cents, down 10.6% from a year ago.

Starhill Global Real Estate Investment Trust (SGX: P40U) has interests in 12 properties in Singapore, Australia, Malaysia, China, and Japan. In Singapore, Starhill Global REIT has interests in two buildings along Orchard Road, namely, Wisma Atria and Ngee Ann City.

Starhill Global REIT ended the reporting quarter with an overall committed occupancy rate of 93.8%. This is a decline from the 95.1% recorded a quarter ago and the 98.3% seen a year ago.

For more information about other REITs that have delivered weaker performances recently, please click here.

Gross revenue declined 2.7%, while net property income (NPI) decreased 1.7% year-on-year. Consequently, distributions per unit (DPU) ticked downwards by 0.8% from 1.31 cents to 1.30 cents. For more information about the latest quarterly result, click here.

Stronger revenue in Singapore and Malaysia (+2.6% and 7.7% year-on year respectively) was offset by weaker revenues in Australia and Others (China and Japan), which fell 10% and over 51%, respectively.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.