SABANA SHARI’AH COMPLIANT REIT FINANCIAL STATEMENTS …sabana.listedcompany.com/newsroom/20150121_191010_M1GU_ZZ… · 1 JANUARY 2014 TO 31 DECEMBER 2014 ... Industrial Real Estate

SABANA SHARI’AH COMPLIANT REIT FINANCIAL STATEMENTS AND DISTRIBUTION ANNOUNCEMENTFOR FOURTH QUARTER FROM 1 OCTOBER 2014 TO 31 DECEMBER 2014 AND FULL YEAR FROM 1 JANUARY 2014 TO 31 DECEMBER 2014

INTRODUCTION Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (“Sabana Shari’ah Compliant REIT” or “Trust”) is a real estate investment trust constituted on 29 October 2010 (as amended) under the laws of Singapore by the Trust Deed entered between Sabana Real Estate Investment Management Pte. Ltd. as the manager (the “Manager”) and HSBC Institutional Trust Services (Singapore) Limited as the trustee (the “Trustee”) of Sabana Shari’ah Compliant REIT. Following the acquisition of the property at 10 Changi South Street 2 (the “Acquisition Property”) on 15 December 2014, the portfolio of Sabana Shari’ah Compliant REIT as at the reporting date comprises 23 quality industrial properties (the “Properties”) strategically located across Singapore. The Properties are: 1. 151 Lorong Chuan, New Tech Park, Singapore 556741 2. 8 Commonwealth Lane, Singapore 149555 3. 9 Tai Seng Drive, Geo-Tele Centre, Singapore 535227 4. 200 Pandan Loop, Pantech 21, Singapore 128388 5. 15 Jalan Kilang Barat, Frontech Centre, Singapore 159357 6. 33 & 35 Penjuru Lane, Freight Links Express Logisticpark, Singapore 609200/609202 7. 18 Gul Drive, Singapore 629468 8. 1 Tuas Avenue 4, Singapore 639382 9. 34 Penjuru Lane, Penjuru Logistics Hub, Singapore 609201 10. 51 Penjuru Road, Freight Links Express Logisticentre, Singapore 609143 11. 26 Loyang Drive, Singapore 508970 12. 3 Kallang Way 2A, Fong Tat Building, Singapore 347493 13. 218 Pandan Loop, Singapore 128408 14. 123 Genting Lane, Yenom Industrial Building, Singapore 349574 15. 30 & 32 Tuas Avenue 8, Singapore 639246/639247 16. 3A Joo Koon Circle, Singapore 629033 17. 2 Toh Tuck Link, Singapore 596225 18. 21 Joo Koon Crescent, Singapore 629026 19. 39 Ubi Road 1, Singapore 408695 20. 6 Woodlands Loop, Singapore 738346 21. 23 Serangoon North Avenue 5, BTH Centre, Singapore 554530 22. 508 Chai Chee Lane, Singapore 469032 23. 10 Changi South Street 2, Singapore 486596 On 19 March 2014 and 3 October 2014, Sabana Sukuk Pte. Ltd. (“SSPL”), a wholly-owned subsidiary of the Trust, issued S$90.0 million in principal amount of 4.0 Per Cent. Fixed Periodic Distribution Trust Certificates due 19 March 2018 (“Trust Certificates Series I”) and S$100.0 million in principal amount of 4.25 Per Cent. Fixed Periodic Distribution Trust Certificates due 3 April 2019 (“Trust Certificates Series II”) respectively (collectively the “2014 Trust Certificates”) under the S$500.0 million Multicurrency Islamic Trust Certificates Issuance Programme (the “Programme”) that was set up on 16 April 2013. The proceeds of the 2014 Trust Certificates were applied towards the full and partial refinancing of the S$100.2 million and S$177.6 million term facilities under the existing Commodity Murabaha Facilities (“Existing CMF”) ahead of their maturities in November 2014 and August 2015 respectively and partial financing of the Acquisition Property. On 1 April 2014, Sabana Shari’ah Compliant REIT announced the establishment of a distribution reinvestment plan (“DRP”), which will give Unitholders the option to receive distributions in the form of fully-paid new units in Sabana Shari’ah Compliant REIT in lieu of part only or all of the cash amount of any distribution to which the DRP applies. On 25 November 2014, Sabana Shari’ah Compliant REIT was granted new S$243.0 million Commodity Murabaha Facilities (“New CMF”) to refinance and to roll-over the outstanding amounts under the Existing CMF. The financial information of Sabana Shari’ah Compliant REIT and its subsidiaries (“Sabana Group” or “Group”) for the full year ended 31 December 2014 as set out in this announcement have been extracted from the financial statements for the year ended 31 December 2014 which has been reviewed by our auditors in accordance with Singapore Standard on Review Engagements 2410.


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SUMMARY OF RESULTS FOR SABANA GROUP

Group

Quarter Fav / (Unfav)

YTD Fav / (Unfav) 4Q 2014 4Q 2013 31/12/14 31/12/13

S$'000 S$'000 % S$'000 S$'000 %

Gross revenue 25,292 24,824 1.9 100,342 89,485 12.1

Net property income 18,163 19,875 (8.6) 72,946 80,360 (9.2)

Income available for distribution 12,891 15,127 (14.8) 51,624 61,755 (16.4)

Distribution per unit ("DPU") (cents) (a)

1.78 2.19 (18.7) 7.33 9.38 (21.9)

Annualised DPU (cents) 7.06 8.69 (18.7) 7.33 9.38 (21.9)

Note: (a) Please refer to Item 6 on Page 15 for the DPU computation.


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1 (a)(i) Statements of Total Return and Distribution Statements (4Q 2014 vs 4Q 2013)

Group Trust

Statements of Total Return Quarter Fav / (Unfav)

Quarter Fav / (Unfav) 4Q 2014 4Q 2013 4Q 2014 4Q 2013

S$'000 S$'000 % S$'000 S$'000 %

Gross revenue (a)

25,292 24,824 1.9 25,292 24,824 1.9

Property expenses (b)

(7,129) (4,949) (44.0) (7,129) (4,949) (44.0)


Finance income 15 7 114.3 15 7 114.3

Finance costs (7,546) (5,643) (33.7) (7,426) (5,530) (34.3)

Net finance costs (c)

(7,531) (5,636) (33.6) (7,411) (5,523) (34.2)

Amortisation of intangible assets (341) (391) 12.8 (341) (391) 12.8

Manager’s fees (1,560) (1,559) (0.1) (1,560) (1,559) (0.1) Trustee’s fees (132) (128) (3.1) (132) (128) (3.1)

Donation of non-Shari’ah compliant income (d)

(7) (39) 82.1 (7) (39) 82.1

Other trust expenses (266) (126) (111.1) (270) (130) (107.7)

Net income 8,326 11,996 (30.6) 8,442 12,105 (30.3)

Net change in fair value of financial derivatives (e)

1,992 740 169.2 1,514 249 NM Net change in fair value of investment properties

(f) (7,501) 12,856 (158.3) (7,501) 12,856 (158.3)

Total return for the period before taxation 2,817 25,592 (89.0) 2,455 25,210 (90.3) Tax expense

(g) * * - - - -

Total return for the period after taxation 2,817 25,592 (89.0) 2,455 25,210 (90.3)

Group Trust

Distribution Statements Quarter Fav / (Unfav)


S$'000 S$'000 % S$'000 S$'000 %


Non-tax deductible/(chargeable) items: Manager’s fees paid/payable in units 1,248 1,247 0.1 1,248 1,247 0.1 Amortisation of intangible assets 341 391 (12.8) 341 391 (12.8) Amortisation of transaction costs

(h) 672 1,432 (53.1) 556 1,323 (58.0)

Transaction costs written off ^ 1,325 - NM 1,325 - NM Break fees on termination of profit rate swaps ^ 1,028 - NM 1,028 - NM Trustee’s fees 132 128 3.1 132 128 3.1 Donation of non-Shari’ah compliant income 7 39 (82.1) 7 39 (82.1) Net change in fair value of financial derivatives (1,992) (740) (169.2) (1,514) (249) NM Net change in fair value of investment properties 7,501 (12,856) 158.3 7,501 (12,856) 158.3

Effects of recognising rental income on a straight line basis over the lease term (274) (93) (194.6) (274) (93) (194.6)

Other items 86 (13) NM 86 (13) NM

Net effect of non-tax deductible/(chargeable)

items 10,074 (10,465) 196.3 10,436 (10,083) 203.5

Income available for distribution to Unitholders for the period 12,891 15,127 (14.8) 12,891 15,127 (14.8)

NM denotes “not meaningful” * Less than S$1,000 ^ Refer to Item 1(b)(ii) on Page 9 for further details

Notes: (a) Gross revenue comprises rental and other operating income from the Properties.

(b) Property expenses comprise:

(i) Service, repairs, maintenance and insurances; (ii) Property and lease management fees; (iii) Applicable property tax, land rent and utilities expenses related to properties not under triple-net

master lease agreements; (iv) Marketing and lease administrative expenses; and (v) Other reimbursable expenses payable to the Property Manager.


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(c) Included in net finance costs are the following:

Group Trust

Quarter Fav / (Unfav)


S$'000 S$'000 % S$'000 S$'000 %

Finance income:

- Profit income from fixed deposits with Islamic financial institutions 8 3 166.7 8 3 166.7

- Ta’widh (compensation on late payment of rent) 7 4 75.0 7 4 75.0

15 7 114.3 15 7 114.3

Finance costs: - Commodity Murabaha Facilities (1,452) (2,453) 40.8 (1,452) (2,453) 40.8 - Profit rate swaps (251) (875) 71.3 (251) (875) 71.3 - Convertible Sukuk (822) (822) - - - - - Trust Certificates (1,944) - NM - - - - Loans from subsidiaries - - - (2,766) (822) (236.5) - Amortisation of transaction costs (672) (1,432) 53.1 (556) (1,323) 58.0 - Transaction costs written off ^ (1,325) - NM (1,325) - NM - Break fees on termination of profit rate swaps ^ (1,028) - NM (1,028) - NM - Brokerage and agent fees (52) (61) 14.8 (48) (57) 15.8

(7,546) (5,643) (33.7) (7,426) (5,530) (34.3)

Net finance costs (7,531) (5,636) (33.6) (7,411) (5,523) (34.2)

NM denotes “not meaningful” ^ Refer to Item 1(b)(ii) on Page 9 for further details

(d) This relates to the net income which was subjected to the cleansing process and was approved by the

Independent Shari’ah Committee to be and donated to the following beneficiaries: 4Q 2014 • Majlis Ugama Islam Singapura for the “Special Collection for Victims of Malaysian Floods” fund. 4Q 2013 • Singapore Kadayanallur Muslim League; and • Singapore Amalgamated Services Co-operative Organisation Limited (“SASCO”) Community Project

Fund. (e) Net change in fair value of financial derivatives relates to the change in the fair value of the profit rate

swaps and the embedded derivatives component of the Convertible Sukuk based on broker quotes recognised between the last quarter and at the reporting date.

(f) Net change in fair value of investment properties in 4Q 2014 relates to:

(i) The difference in the acquisition costs of the Acquisition Property and its fair value per the independent valuer, Cushman & Wakefield VHS Pte. Ltd. (“Cushman”). The acquisition costs comprise the purchase consideration paid to the vendor, land premium payable to Jurong Town Corporation (“Land Premium”), stamp duty on the Land Premium and any directly attributable expenditure, such as acquisition fees and professional fees (“Acquisition Costs”); and

(ii) The revaluation loss based on independent valuations of the properties undertaken by DTZ Debenham Tie Leung (SEA) Pte Ltd (“DTZ”) as at 31 December 2014.

Net change in fair value of investment properties in 4Q 2013 relates to the revaluation surplus based on

independent valuations of the properties undertaken by Knight Frank Pte Ltd (“Knight Frank”) as at 31 December 2013.

(g) This pertains to the tax expense of subsidiaries. (h) This represents the amortisation of upfront fees and legal fees pertaining to the Existing CMF, New CMF,

Convertible Sukuk, 2014 Trust Certificates and loans from subsidiaries. These items are non-tax deductible and have no impact on income available for distribution.


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1 (a)(ii) Statements of Total Return and Distribution Statements (Current Year to Date (“YTD”) vs Prior YTD)

Group Trust

Statements of Total Return YTD Fav / (Unfav)

YTD Fav / (Unfav) 31/12/14 31/12/13 31/12/14 31/12/13

S$'000 S$'000 % S$'000 S$'000 %

Gross revenue (a)

100,342 89,485 12.1 100,342 89,485 12.1


(27,396) (9,125) (200.2) (27,396) (9,125) (200.2)


Finance income 82 61 34.4 82 61 34.4

Finance costs (24,565) (20,310) (21.0) (24,102) (19,861) (21.4)


(24,483) (20,249) (20.9) (24,020) (19,800) (21.3)

Amortisation of intangible assets (1,383) (1,427) 3.1 (1,383) (1,427) 3.1 Manager’s fees (6,173) (5,868) (5.2) (6,173) (5,868) (5.2) Trustee’s fees (520) (488) (6.6) (520) (488) (6.6) Donation of non-Shari’ah compliant income

(d) (54) (131) 58.8 (54) (131) 58.8

Other trust expenses (1,225) (1,415) 13.4 (1,239) (1,427) 13.2 Loss on conversion of Convertible Sukuk

(e) - (1,228) 100.0 - (1,010) 100.0

Net income 39,108 49,554 (21.1) 39,557 50,209 (21.2)

Net change in fair value of financial derivatives (f)

5,298 1,393 280.3 3,137 2,689 16.7 Net change in fair value of investment properties

(g) (7,501) 12,441 (160.3) (7,501) 12,441 (160.3)

Total return for the year before taxation 36,905 63,388 (41.8) 35,193 65,339 (46.1)

Tax expense (h)

* * - - - -

Total return for the year after taxation 36,905 63,388 (41.8) 35,193 65,339 (46.1)

Group Trust

Distribution Statements YTD Fav / (Unfav)

YTD Fav / (Unfav) 31/12/14 31/12/13 31/12/14 31/12/13

S$'000 S$'000 % S$'000 S$'000 %


Non-tax deductible/(chargeable) items: Manager’s fees paid/payable in units 4,938 4,694 5.2 4,938 4,694 5.2 Amortisation of intangible assets 1,383 1,427 (3.1) 1,383 1,427 (3.1) Amortisation of transaction costs

(i) 3,086 3,940 (21.7) 2,635 3,502 (24.8)

Transaction costs written off ^ 1,585 - NM 1,585 - NM Break costs on prepayment of borrowings ^ 909 - NM 909 - NM Break fees on termination of profit rate swaps ^ 1,617 - NM 1,617 - NM Trustee’s fees 520 488 6.6 520 488 6.6 Donation of non-Shari’ah compliant income 54 131 (58.8) 54 131 (58.8) Net change in fair value of financial derivatives (5,298) (1,393) (280.3) (3,137) (2,689) (16.7) Net change in fair value of investment properties

7,501 (12,441) 160.3 7,501 (12,441) 160.3

Loss on conversion of Convertible Sukuk - 1,228 (100.0) - 1,010 (100.0) Effects of recognising rental income on a straight line basis over the lease term (2,044) (571) (258.0) (2,044) (571) (258.0)

Other items 468 864 (45.8) 470 865 (45.7)

Net effect of non-tax deductible/(chargeable) items

14,719 (1,633) NM 16,431 (3,584) (558.5)

Income available for distribution to Unitholders for the year 51,624 61,755 (16.4) 51,624 61,755 (16.4)

NM denotes “not meaningful” * Less than S$1,000 ^ Refer to Item 1(b)(ii) on Page 9 for further details.

Notes: (a) Gross revenue comprises rental and other operating income from the Properties.

(b) Property expenses comprise:

(i) Service, repairs, maintenance and insurances; (ii) Property and lease management fees; (iii) Applicable property tax, land rent and utilities expenses related to properties not under triple-net

master lease agreements; (iv) Marketing and lease administrative expenses; and (v) Other reimbursable expenses payable to the Property Manager.


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(c) Included in net finance costs are the following:

Group Trust

YTD Fav / (Unfav)

YTD Fav / (Unfav) 31/12/14 31/12/13 31/12/14 31/12/13

S$'000 S$'000 % S$'000 S$'000 %

Finance income:

- Profit income from fixed deposits with Islamic financial institutions 41 47 (12.8) 41 47 (12.8)

- Ta’widh (compensation on late payment of rent) 41 14 192.9 41 14 192.9

82 61 34.4 82 61 34.4

Finance costs: - Commodity Murabaha Facilities (7,770) (9,797) 20.7 (7,770) (9,797) 20.7 - Profit rate swaps (2,230) (3,002) 25.7 (2,230) (3,002) 25.7 - Convertible Sukuk (3,263) (3,330) 2.0 - - - - Trust Certificates (3,867) - NM - - - - Loans from subsidiaries - - - (7,130) (3,330) (114.1) - Amortisation of transaction costs (3,086) (3,940) 21.7 (2,635) (3,502) 24.8 - Transaction costs written off ^ (1,585) - NM (1,585) - NM - Break costs on prepayment of borrowings ^ (909) - NM (909) - NM - Break fees for profit rate swaps ^ (1,617) - NM (1,617) - NM - Brokerage and agent fees (238) (241) 1.2 (226) (230) 1.7

(24,565) (20,310) (21.0) (24,102) (19,861) (21.4)

Net finance costs (24,483) (20,249) (20.9) (24,020) (19,800) (21.3)

NM denotes “not meaningful” ^ Refer to item 1(b)(ii) on Page 9 for further details

(d) This relates to the net income which was subjected to the cleansing process and was approved by the

Independent Shari’ah Committee to be and donated to the following beneficiaries: Current YTD • Lien Aid (1Q 2014); • Ananias Centre (1Q 2014); • Muslim Kidney Action Association (2Q 2014); • Operation Hope Foundation (3Q 2014); • Habitat for Humanity Singapore (3Q 2014); and • Majlis Ugama Islam Singapura for the “Special Collection for Victims of Malaysian Floods” fund

(4Q 2014). Prior YTD • Mendaki Social Enterprise Network Services Pte Ltd (1Q 2013); • Singapore Red Cross Society for the Philippines Relief Fund (1Q 2013); • Lions Befrienders Service Association (Singapore) (2Q 2013); • Ananias Centre (2Q 2013); • Ng Wei Qi Neira, an infant diagnosed with brain tumours (3Q 2013); • Singapore Kadayanallur Muslim League (4Q 2013); and • SASCO Community Project Fund (4Q 2013). (e) This represents the Prior YTD loss relating to the conversion of aggregate principal amount of S$7.5

million of Convertible Sukuk by Converting Sukukholders into 6,285,090 units at the then conversion price of S$1.1933. This item is non-tax deductible and has no impact on income available for distribution.

(f) Net change in fair value of financial derivatives relates to the change in the fair value of the profit rate

swaps and the embedded derivatives component of the Convertible Sukuk based on broker quotes recognised YTD.

(g) Net change in fair value of investment properties in Current YTD relates to:

(i) The difference in the Acquisition Costs of the Acquisition Property and its fair value per Cushman; and (ii) The revaluation loss based on independent valuations of the properties undertaken by DTZ as at 31

December 2014. Net change in fair value of investments properties in Prior YTD relates to the revaluation surplus based on

independent valuations of the properties undertaken by Knight Frank as at 31 December 2013. (h) This pertains to the tax expense of subsidiaries.


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(i) This represents the amortisation of upfront fees and legal fees pertaining to the Existing CMF, New CMF, Convertible Sukuk, 2014 Trust Certificates and loans from subsidiaries. These items are non-tax deductible and have no impact on income available for distribution.

1 (b)(i) Statements of financial position, together with comparatives as at the end of the immediate

preceding financial year

Group Trust

Statements of Financial Position 31/12/14 31/12/13 Change 31/12/14 31/12/13 Change

S$'000 S$'000 % S$'000 S$'000 %

Non-current assets

Investment properties (a)

1,260,053 1,211,430 4.0 1,260,053 1,211,430 4.0

Intangible assets (b)

447 1,830 (75.6) 447 1,830 (75.6)

Subsidiaries (c)

- - - * * -

Derivative assets (d)

154 - NM 154 - NM

Total non-current assets 1,260,654 1,213,260 3.9 1,260,654 1,213,260 3.9

Current assets

Trade and other receivables (e)

8,719 6,409 36.0 8,712 6,407 36.0

Cash and cash equivalents (f)

12,287 17,084 (28.1) 12,282 17,078 (28.1)

Total current assets 21,006 23,493 (10.6) 20,994 23,485 (10.6)

Total assets 1,281,660 1,236,753 3.6 1,281,648 1,236,745 3.6

Current liabilities

Trade and other payables (g)

14,803 18,869 (21.5) 14,796 18,864 (21.6)

Borrowings (h)

98,875 130,376 (24.2) 100,256 130,376 (23.1)

Derivative liabilities (i)

601 3,479 (82.7) - 717 (100.0)

Total current liabilities 114,279 152,724 (25.2) 115,052 149,957 (23.3)

Non-current liabilities

Trade and other payables (g)

13,206 6,626 99.3 13,206 6,626 99.3

Borrowings (h)

379,973 317,016 19.9 379,973 318,848 19.2

Derivative liabilities (i)

1,617 3,883 (58.4) 1,617 3,883 (58.4)

Total non-current liabilities 394,796 327,525 20.5 394,796 329,357 19.9

Total liabilities 509,075 480,249 6.0 509,848 479,314 6.4

Net assets 772,585 756,504 2.1 771,800 757,431 1.9

Represented by:

Unitholders’ funds (j)

772,585 756,504 2.1 771,800 757,431 1.9

NM denotes “not meaningful” * Less than S$1,000

Notes: (a) The carrying amounts of the Properties as at 31 December 2014 were based on the independent

valuations of the Properties undertaken by independent valuers, DTZ and Cushman. The increase in investment properties mainly arises from the Acquisition Property and is partially offset by the lower fair values of the properties appraised by DTZ.

(b) This represents the unamortised rental support provided by the vendor of 9 Tai Seng Drive and 6 Woodlands Loop which can be drawn down over five years from 26 November 2010 and three years from 15 December 2011, being their respective acquisition dates. The decrease in intangible assets is mainly due to the amortisation of the rental support of these two properties with the rental support of 6 Woodlands Loop being fully amortised during Current YTD.

(c) This relates to the cost of investments in Sabana Treasury Pte. Ltd. (“STPL”) and SSPL, wholly-owned

subsidiaries of the Trust. (d) Non-current derivative assets relate to the fair value of the profit rate swap entered into to hedge the profit

rate risks on the S$90.0 million Term New CMF B during Current YTD. (e) This relates to trade receivables, prepayments, deposits, and other receivables. The increase is mainly

due to the straight-lining adjustments on rental revenue over the term of leases which have step-up rental escalation clauses and rent-free periods during Current YTD.


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(f) This relates to bank balances and Shari’ah compliant deposits held with Islamic financial institutions. Please refer to the Statement of Cashflows under Item 1(c) on Page 11 for further details in the movement of cash and cash equivalents.

(g) This relates to trade payables, security deposits, rental received in advance, retention sums and accruals

and provisions. The movements in current and non-current trade payables from 31 December 2013 are mainly due to: (i) Reclassification of security deposits from current to non-current upon renewal of tenants’ expiring

leases to new expiry dates of more than twelve months from the reporting date; (ii) Non-current security deposits obtained from new tenants; (iii) Higher rental received in advance from tenants as at 31 December 2014 as compared to 31

December 2013; and (iv) Utilisation of rental support received upfront from the vendors of 9 Tai Seng Drive and 6 Woodlands

Loop. (h) Current borrowings represent the following at Sabana Group and the Trust: (i) Amortised cost of the principal amount of S$28.5 million drawn from the Revolving Existing CMF D; (ii) Amortised cost of the liability component of the remaining principal amount of S$72.5 million of

Convertible Sukuk issued by STPL; and (iii) Amortised cost of the remaining principal amount of S$72.5 million of STPL’s profit bearing loan to

the Trust, which was raised from the issuance of the Convertible Sukuk by STPL. Non-current borrowings represent the following at Sabana Group and the Trust:

(i) Amortised cost of the principal amount of S$75.0 million drawn from Term Existing CMF F; (ii) Amortised cost of the principal amount of S$190.0 million 2014 Trust Certificates issued by SSPL;

and (iii) Amortised cost of the principal amount of S$190.0 million of SSPL’s profit bearing loans to the Trust,

which was raised from the issuance of the 2014 Trust Certificates by SSPL. The movements in current and non-current borrowings are mainly due to:

(i) Issuance of the S$190.0 million 2014 Trust Certificates by SSPL and the S$190.0 million loans from SSPL to the Trust at the Group and Trust level respectively;

(ii) Prepayment of S$100.2 million of the Term Existing CMF C and S$177.6 million of the Term Existing CMF E, then maturing in November 2014 and August 2015 respectively;

(iii) Drawdown of S$90.0 million of the 2-year Term New CMF B and S$30 million of the 5-year Term New CMF C in 4Q 2014; and

(iv) Reclassification of the Convertible Sukuk and STPL’s profit bearing loan to the Trust from non-current to current as these borrowings, which have put options exercisable on 24 September 2015, may be redeemed by their respective holders.

As at the reporting date, both the Group and the Trust are in net current liabilities position mainly due to

the current borrowings. (i) Current derivative liabilities relate to the fair value of the embedded derivatives component of the

Convertible Sukuk issued by STPL. Non-current derivative liabilities relate to the fair value of the profit rate swap entered into to hedge the

profit rate risk on the S$75.0 million Term CMF F. The movements in current and non-current derivative liabilities are mainly due to: (i) Current YTD change in the fair value of the embedded derivatives component of the Convertible

Sukuk; (ii) Current YTD change in the fair value of the profit rate swap used for hedging Term Existing CMF F;

and (iii) The termination of the profit rate swaps used for hedging Term Existing CMF C and E ahead of their

maturities in November 2014 and August 2015 respectively. (j) Please refer to the Statements of Movements in Unitholders’ Funds under Item (1)(d)(ii) on Page 12 for

details.


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1 (b)(ii) Aggregate amount of borrowings and debt securities

Group Trust

31/12/14 31/12/13 31/12/14 31/12/13

S$'000 S$'000 S$'000 S$'000

Secured borrowings

Amount repayable within one year:

Term Existing CMF C (a)

- 100,274 - 100,274

Revolving Existing CMF D (a)

28,500 30,500 28,500 30,500

Less: Unamortised capitalised transaction costs - (398) - (398)

28,500 130,376 28,500 130,376

Amount repayable after one year:

Term New CMF B (a)

90,000 - 90,000 - Term New CMF C

(a) 30,000 - 30,000 -

Term Existing CMF E (a)

- 177,563 - 177,563

Term Existing CMF F (a)

75,000 75,000 75,000 75,000

Less: Unamortised capitalised transaction costs (3,383) (5,225) (3,383) (5,225)

191,617 247,338 191,617 247,338

Total secured borrowings 220,117 377,714 220,117 377,714

Unsecured borrowings

Amount repayable within one year:

Convertible Sukuk - debt component (b)

70,375 - - -

Loans from subsidiaries (c)

- - 72,500 -

Less: Unamortised capitalised transaction costs - - (744) -

70,375 - 71,756 -

Amount repayable after one year:

Convertible Sukuk - debt component (b)

- 69,678 - -

Trust Certificates (d)

190,000 - - -

Loans from subsidiaries (c)

- - 190,000 72,500

Less: Unamortised capitalised transaction costs (1,644) - (1,644) (990)

188,356 69,678 188,356 71,510

Total unsecured borrowings 258,731 69,678 260,112 71,510

Total borrowings 478,848 447,392 480,229 449,224

Details of borrowings, debt securities and collaterals In 2014, Sabana Group completed the following refinancing exercises to increase the weighted average term of existing debt and further diversify both debt maturity profile and funding sources: (i) In 1Q 2014, S$90.0 million of the Term Existing CMF C was repaid by the net proceeds of the Trust

Certificates Series I ahead of its maturity in November 2014; and (ii) In 4Q 2014, the remaining S$10.2 million Term Existing CMF C and S$177.6 million Term Existing CMF E

were prepaid by the net proceeds of the Trust Certificates Series II, Term New CMF B and Term New CMF C ahead of their maturities in November 2014 and August 2015 respectively (“4Q 2014 Refinancing Exercise”) (collectively the “Refinancing Exercises”).

As a result, the following non-recurring finance costs associated with the Refinancing Exercises were incurred: (i) Break costs on the prepayment of S$90.0 million on Term Existing CMF C; (ii) Unamortised transaction costs relating to the S$100.2 million of Term Existing CMF C and S$177.6 million of Term Existing CMF E which were prepaid being written off; and (iii) Break fees on the termination of the profit rate swaps used for hedging Term Existing CMF C and Term Existing CMF E. The above items are non-tax deductible and have no impact on income available for distribution.


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Secured borrowings (a) As at the reporting date, the following Existing CMF and New CMF were outstanding:

(i) 2-year Term New CMF B of S$90.0 million maturing in November 2016; (ii) 5-year Term New CMF C of S$30.0 million maturing in November 2019; (iii) 3-year Revolving Existing CMF D of S$28.5 million maturing in November 2016; and (iv) 5-year Term Existing CMF F of S$75.0 million maturing in August 2017. As at the reporting date, the Revolving Existing CMF D has an undrawn amount of S$19.5 million.

The Existing CMF and New CMF are secured by, inter alia:

(1) A first ranking legal mortgage over all the Properties except for 3A Joo Koon Circle, 2 Toh Tuck Link, 21 Joo Koon Crescent, 39 Ubi Road 1, 6 Woodlands Loop, 23 Serangoon North Avenue 5, 508 Chai Chee Lane and 10 Changi South Street 2 (collectively, the “Securitised Properties”), (or, where title to or lease relating to the Securitised Properties has not been issued, an assignment of building agreement or agreement for lease (as the case may be) coupled with a mortgage in escrow);

(2) Assignment of insurances, assignment of proceeds and assignment of Property Management Agreements relating to the Securitised Properties; and

(3) A fixed and floating charge over the other assets of Sabana Shari’ah Compliant REIT relating to the Securitised Properties.

Subsequent to the reporting date, the discharge documents in respect of the first ranking legal mortgage,

assignment of JTC property documents, assignment of insurances, assignment of proceeds, assignment of property management agreements and debenture relating to 5 properties namely, 123 Genting Lane, 200 Pandan Loop, 8 Commonwealth, 34 Penjuru Lane and 3 Kallang Way 2A were executed and the discharge documents in respect of the first ranking legal mortgages were lodged with Singapore Land Authority on 15 January 2015.

Unsecured borrowings (b) Convertible Sukuk

Group

31/12/14 31/12/13

Convertible Sukuk - debt component S$'000 S$'000

Carrying amount of debt component at beginning of the year 69,678 76,163

Profit accretion, including amortisation of transaction costs 697 679

Extinguishment of debt component arising from conversion of Convertible Sukuk - (7,164)

Carrying amount of debt component at end of the year 70,375 69,678

The S$80.0 million 4.5 Per Cent. Convertible Sukuk issued by STPL on 24 September 2012 and due on 24 September 2017, is unsecured, and convertible by Sukukholders into units of the Trust at any time on or after 9 November 2012 at the initial conversion price of S$1.1933 per unit. As at the reporting date, the conversion price per unit is S$1.1199. The Convertible Sukuk with a put option exercisable on 24 September 2015 may be redeemed by Sukukholders.

(c) Loans from subsidiaries

As at the reporting date, the following loans from subsidiaries were outstanding: (i) S$72.5 million loan, which is equivalent to the principal amount of the Convertible Sukuk

outstanding, granted by STPL to the Trust, through the proceeds raised from the issuance of the Convertible Sukuk at the same repayment terms, is unsecured and profit bearing;

(ii) S$90.0 million loan, which is equivalent to the principal amount of the Trust Certificates Series I, granted by SSPL to the Trust, through the proceeds raised from the issuance of the Trust Certificates Series I at the same repayment terms, is unsecured and profit bearing; and

(iii) S$100.0 million loan, which is equivalent to the principal amount of the Trust Certificates Series II, granted by SSPL to the Trust, through the proceeds raised from the issuance of the Trust Certificates Series II at the same repayment terms, is unsecured and profit bearing.


Page 11

(d) Trust Certificates

The S$190.0 million 2014 Trust Certificates are unsecured. 1 (c) Statement of Cash Flows

Group

Statement of Cash Flows Quarter YTD

4Q 2014 4Q 2013 31/12/14 31/12/13

S$'000 S$'000 S$'000 S$'000

Cash flows from operating activities

Total return for the period after taxation and before distribution 2,817 25,592 36,905 63,388

Adjustments for:

Amortisation of intangible assets 341 391 1,383 1,427

Manager’s fees paid/payable in units 1,248 1,247 4,938 4,694

Net change in fair value of financial derivatives (1,992) (740) (5,298) (1,393)

Net change in fair value of investment properties 7,501 (12,856) 7,501 (12,441)

Loss on conversion of Convertible Sukuk - - - 1,228

Net finance costs 7,531 5,636 24,483 20,249

17,446 19,270 69,912 77,152

Change in trade and other receivables (420) (2,523) (2,310) (3,036)

Change in trade and other payables 2,264 6,740 728 1,025

Cash generated from operating activities 19,290 23,487 68,330 75,141

Ta’widh (compensation on late payment of rent) received 7 4 41 14

Net cash from operating activities 19,297 23,491 68,371 75,155

Cash flows from investing activities

Capital expenditure on investment properties (346) (81) (1,216) (81)

Purchase of investment properties (32,453)(a)

200 (32,453)(a)

(67,965)

Profit income received from Islamic financial institutions 8 3 41 47

Net cash (used in)/from investing activities (32,791) 122 (33,628) (67,999)

Cash flows from financing activities Proceeds from issue of new units - - - 40,000 Break costs incurred on prepayment of borrowings - - (909) - Break fees on termination of profit rate swaps (1,028) - (1,617) -

Proceeds from borrowings 220,000 30,500 310,000 60,500

Repayment of borrowings (189,837) (30,000) (279,837) (30,000)

Issue expenses paid (24) - (74) (633)

Transaction costs paid (2,608) (602) (3,378) (684)

Finance costs paid (1,959) (3,215) (15,582) (16,147)

Distributions paid (11,186)(b)

(15,537) (48,143)(c)

(62,073)

Net cash from/(used in) financing activities 13,358 (18,854) (39,540) (9,037)

Net (decrease)/increase in cash and cash equivalents (136) 4,759 (4,797) (1,881)

Cash and cash equivalents at beginning of the period/year 12,423 12,325 17,084 18,965

Cash and cash equivalents at end of the period/year 12,287 17,084 12,287 17,084

Notes: (a) This amount excludes approximately S$22.5 million as part satisfaction of the purchase consideration for

the Acquisition Property by the issuance of 23,464,386 new units. (b) This amount excludes approximately S$1.5 million (net of withholding tax) distributed by the issuance of

1,505,805 new units in 4Q 2014 as part payment of distributions for the period from 1 July 2014 to 30 September 2014, pursuant to the DRP.

(c) This amount excludes approximately S$5.7 million (net of withholding tax) distributed by the issuance of

5,609,340 new units in Current YTD as part payment of distributions for the period from 1 January 2014 to 30 September 2014, pursuant to the DRP.


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1 (d)(i) Statements of Movements in Unitholders’ Funds (4Q 2014 vs 4Q 2013)

Group Trust

Quarter Quarter

Statements of Movements in Unitholders’ Funds 4Q 2014 4Q 2013 4Q 2014 4Q 2013

S$'000 S$'000 S$'000 S$'000

Balance at beginning of the period 757,275 745,202 756,852 746,511

Operations Total return for the period after taxation and before distribution 2,817 25,592 2,455 25,210 760,092 770,764 759,307 771,721

Unitholders’ transactions

Issue of new units: - Purchase consideration for an investment property paid in units

(a) 22,455 - 22,455 -

- Manager’s fees payable in units (b)

1,248 1,247 1,248 1,247 - DRP

(c) 1,478 - 1,478 -

Issue expenses (24) - (24) - Distributions to Unitholders (12,664) (15,537) (12,664) (15,537) Net increase/(decrease) in net assets resulting from Unitholders’ transactions 12,493 (14,290) 12,493 (14,290)

Unitholders’ funds at end of the period 772,585 756,504 771,800 757,431

Notes: (a) This represents the value of new units issued as part satisfaction of the purchase consideration for the

Acquisition Property. (b) This represents the value of new units to be issued to the Manager as partial consideration of the

Manager’s fees incurred for the period. The units are to be issued within 30 days from the quarter end. (c) This represents the value of new units issued as part payment of distributions for the period from 1 July

2014 to 30 September 2014, pursuant to the DRP. 1 (d)(ii) Statements of Movements in Unitholders’ Funds (Current YTD vs Prior YTD)

Group Trust

YTD YTD

Statements of Movements in Unitholders’ Funds 31/12/14 31/12/13 31/12/14 31/12/13

S$'000 S$'000 S$'000 S$'000

Balance at beginning of the year 756,504 702,857 757,431 701,833

Operations

Total return for the year after taxation and before distribution 36,905 63,388 35,193 65,339

793,409 766,245 792,624 767,172

Unitholders’ transactions

Issue of new units:

- Private placement - 40,000 - 40,000 - Purchase consideration for an investment property paid in units

(a) 22,455 - 22,455 -

- Manager’s fees paid/payable in units (b)

4,938 4,694 4,938 4,694 - Conversion of Convertible Sukuk

(c) - 8,271 - 8,271

- DRP (d)

5,671 - 5,671 - Issue expenses (74) (633) (74) (633) Distributions to Unitholders (53,814) (62,073) (53,814) (62,073)

Net decrease in net assets resulting from Unitholders’ transactions (20,824) (9,741) (20,824) (9,741)

Unitholders’ funds at end of the year 772,585 756,504 771,800 757,431

Notes: (a) This represents the value of new units issued as part satisfaction of the purchase consideration for the

Acquisition Property. (b) This represents the value of new units issued and to be issued to the Manager as partial consideration of

the Manager’s fees incurred for the year. The units that are to be issued, will be issued within 30 days from the year end.


Page 13

(c) This represents the value of new units issued in Prior YTD upon the conversion of aggregate principal amount of S$7.5 million of Convertible Sukuk by Converting Sukukholders into 6,285,090 units at the then conversion price of S$1.1933.

(d) This represents the value of new units issued as part payment of distributions for the period from 1

January 2014 to 30 September 2014, pursuant to the DRP. 1 (d)(iii) Details of any changes in the units

Group and Trust

Quarter YTD

4Q 2014 4Q 2013 31/12/14 31/12/13

Units in issue: Units in issue at beginning of the period/year 698,425,418 689,704,185 690,774,855 640,490,459

Private placement - - - 40,000,000 Purchase consideration for an investment property paid in units

(a)

23,464,386 - 23,464,386 -

Manager’s fees paid in units 1,228,107 1,070,670 4,775,135 3,999,306

Conversion of Convertible Sukuk (b)

- - - 6,285,090

DRP (c)

1,505,805 - 5,609,340 -

Issued units at the end of the period/year 724,623,716 690,774,855 724,623,716 690,774,855

Units to be issued:

Manager’s fees payable in units (d)

1,358,855 1,184,607 1,358,855 1,184,607

Total issued and to be issued units 725,982,571 691,959,462 725,982,571 691,959,462

Notes: (a) These are new units issued as part satisfaction of the purchase consideration for the Acquisition Property.

(b) These are new units issued in Prior YTD upon conversion of aggregate principal amount of S$7.5 million

of Convertible Sukuk by converting Sukukholders at the then conversion price of S$1.1933. (c) These are new units issued pursuant to the DRP. (d) These are new units to be issued to the Manager as partial consideration of the Manager’s fees incurred

for the period. The units are to be issued within 30 days from the quarter end. Convertible Sukuk Sabana Group has the following Convertible Sukuk outstanding as at 31 December 2014:

Principal Amount Outstanding

Maturity Date Conversion Price per unit as at

31 December 2014

Convertible Sukuk due 2017 S$72.5 million 4.5% per annum. 24 September 2017

S$1.1199

Since the date of their issue, an aggregate principal amount of S$7.5 million of Convertible Sukuk has been converted into 6,285,090 units by converting Sukukholders. Assuming all the outstanding Convertible Sukuk are fully converted based on the current conversion price of S$1.1199, the number of new units to be issued would be 64,737,923 units, representing 8.9% of the total number of the Trust’s units in issue and to be issued of 725,982,571 units as at 31 December 2014. 1 (d)(iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at

the end of the current financial period reported on. Not applicable.

2. Whether the figures have been audited, or reviewed and in accordance with which auditing

standard or practice

The figures have not been audited but have been reviewed by our auditors in accordance with Singapore Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”.


Page 14

3. Where the figures have been audited, or reviewed, the auditors' report (including any qualifications or emphasis of matter)

Please see attached review report.

4. Whether the same accounting policies and methods of computation as in the issuer's most recently audited financial statements have been applied

The Group has applied the same accounting policies and methods of computation in the preparation of the financial statements for the current period compared with the audited financial statements for the year ended 31 December 2013.

5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change

Not applicable.

6. Earnings per unit (“EPU”) and Distribution per unit (“DPU”) of the Group for the current financial

period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends

Earnings per unit (4Q 2014 vs 4Q 2013)

Group Trust

Quarter Quarter

4Q 2014 4Q 2013 4Q 2014 4Q 2013

Basic EPU

Weighted average number of units in issue 703,093,200 691,579,096 703,093,200 691,579,096

Earnings per unit for the period based on the weighted average number of units in issue (cents)

(a)

0.40 3.70 0.35 3.65

Diluted EPU

Weighted average number of units in issue (diluted) 767,831,123 753,853,619 767,831,123 753,853,619

Earnings per unit for the period based on the weighted average number of units in issue (diluted) (cents)

(b)

0.40 (c)

3.46 0.35(c)

3.46

Notes:

(a) The EPU calculation uses the total return for the period after taxation and before distribution, and the

weighted average number of units outstanding during the period.

(b) The diluted EPU calculation uses the total return for the period after taxation and before distribution and

the weighted average number of units outstanding during the period, adjusted for the effects of all dilutive potential units arising from the assumed conversion of the Convertible Sukuk to units.

(c) The diluted EPU were the same as the basic EPU for the Group and the Trust as the Convertible Sukuk

was anti-dilutive at the Group and the Trust level.


Page 15

Earnings per unit (Current YTD vs Prior YTD)

Group Trust

YTD YTD

31/12/14 31/12/13 31/12/14 31/12/13

Basic EPU

Weighted average number of units in issue 696,759,453 657,576,484 696,759,453 657,576,484

Earnings per unit for the year based on the weighted average number of units in issue (cents)

(a)

5.30 9.64 5.05 9.94

Diluted EPU

Weighted average number of units in issue (diluted) 761,497,376 719,851,007 761,497,376 719,851,007

Earnings per unit for the year based on the weighted average number of units in issue (diluted) (cents)

(b)

5.08 9.64(c)

5.05(c)

9.71

Notes:

(a) The EPU calculation uses the total return for the year after taxation and before distribution, and the

weighted average number of units outstanding during the year. (b) The diluted EPU calculation uses the total return for the year after taxation and before distribution and the

weighted average number of units outstanding during the year, adjusted for the effects of all dilutive potential units arising from the assumed conversion of the Convertible Sukuk to units.

(c) The diluted EPU were the same as the basic EPU for the Group and Trust as the Convertible Sukuk was

anti-dilutive at the Group and the Trust level. Distribution per unit

Group and Trust

Quarter YTD

4Q 2014 4Q 2013 31/12/14 31/12/13

Number of units issued and to be issued at end of period entitled to distribution

(a)

725,982,571 691,959,462 725,982,571 691,959,462

Distribution per unit for the period based on the total number of units entitled to distribution (cents)

1.78 2.19 7.33 9.38

Note: (a) The computation of DPU is based on the number of units entitled to distribution, comprising:

(i) The number of units in issue as at 31 December 2014 of 724,623,716 (31 December 2013: 690,774,855); and

(ii) The units to be issued to the Manager by 31 January 2015 as partial consideration of Manager’s fees incurred for 4Q 2014 of 1,358,855 (by 31 January 2014 as partial consideration of Manager’s fees 4Q 2013: 1,184,607).


Page 16

7. Net asset value per unit based on units issued at the end of the financial year and immediately preceding financial year

NAV per unit (S$)

(a)

Group Trust

As at 31/12/14

As at 31/12/13

As at 31/12/14

As at 31/12/13

1.06

1.09 1.06

1.09

Note:

(a) The number of units used to compute NAV per unit is 725,982,571 (31 December 2013: 691,959,462),

comprising:

(i) The number of units in issue as at 31 December 2014 of 724,623,716 (31 December 2013: 690,774,855); and

(ii) The units to be issued to the Manager by 31 January 2015 as partial consideration of Manager’s fees incurred for 4Q 2014 of 1,358,855 (by 31 January 2014 as partial consideration of Manager’s fees incurred for 4Q 2013 of 1,184,607).

8. Review of the performance of the Group for the current financial period reported on

4Q 2014 vs 4Q 2013

Group

Statement of Total Return Quarter Fav / (Unfav)

4Q 2014 4Q 2013

S$'000 S$'000 %

Gross revenue 25,292 24,824 1.9

Property expenses (a)

(7,129) (4,949) (44.0)

Net property income 18,163 19,875 (8.6)

Finance income 15 7 114.3

Finance costs (7,546) (5,643) (33.7)

Net finance costs (b)

(7,531) (5,636) (33.6)

Amortisation of intangible assets (c)

(341) (391) 12.8

Manager’s fees (1,560) (1,559) (0.1)

Trustee’s fees (132) (128) (3.1)


(7) (39) 82.1

Other trust expenses (e)

(266) (126) (111.1)

Net income 8,326 11,996 (30.6)

Net change in fair value of financial derivatives (f)

1,992 740 169.2 Net change in fair value of investment properties

(g) (7,501) 12,856 (158.3)

Total return for the period before taxation and distribution

2,817 25,592 (89.0)

Tax expense * * - Total return for the period before distribution 2,817 25,592 (89.0)

Distribution adjustments (h)

10,074 (10,465) 196.3

Income available for distribution (i)

12,891 15,127 (14.8)

*Less than S$1,000

Notes: (a) Property expenses increased by 44.0% mainly due to:

(i) Higher property tax, service, repairs, maintenance, utilities, and applicable land rent expense, in line with the increase of directly managed multi-tenanted properties from two to seven since 26 November 2013; and

(ii) Lease management fees being charged to the 15 properties acquired during IPO, following the expiry of the three-year waiver period in 4Q 2013.

In line with the higher property expenses, net property income decreased by 8.6%.

(b) Net finance costs increased by 33.6% mainly due to:

(i) Non-recurring unamortised transaction costs being written off on prepayment of borrowings and the break costs on termination of the profit rate swap arising from the 4Q 2014 Refinancing Exercise; and


Page 17

(ii) Higher profit expense arising from higher borrowings with higher average profit rates outstanding in 4Q 2014 over 4Q 2013, attributable to the issuance of the 2014 Trust Certificates to partly fund the Acquisition Property.

(c) Amortisation of intangible assets decreased by 12.8% mainly due to lower utilisation of rental support at 6 Woodlands Loop, being fully amortised in 4Q 2014, and 9 Tai Seng Drive in 4Q 2014 over 4Q 2013.

(d) The decrease in donation of non-Shari’ah compliant income by 82.1% is mainly due to less income

generated from non-Shari’ah compliant activities subjected to cleansing in 4Q 2014 over 4Q 2013. (e) Other trust expenses were 111.1% higher mainly due to higher central registry service charges,

consequent to the implementation of DRP, and professional fees in 4Q 2014 over 4Q 2013. (f) The higher net change in fair value of financial derivatives relates to the fair value change of the profit rate

swaps and the embedded derivatives component of the Convertible Sukuk recognised between the last quarter and at the reporting date.

(g) The net change in fair value of investment properties in 4Q 2014 and 4Q 2013 relates to the revaluation

loss and revaluation surplus of the properties based on independent valuations undertaken by the independent valuers as at 31 December 2014 and 31 December 2013 respectively.

(h) Distribution adjustments were 196.3% higher in 4Q 2014 mainly due to the higher net non-tax deductible

effects on the items stated in (f) and (g) above and the non-recurring finance costs relating to the 4Q 2014 Refinancing Exercise as these items were adjusted back to derive the income available for distribution.

(i) Distributable income decreased by 14.8% in 4Q 2014 over 4Q 2013 mainly due to the following factors:

(i) Lower net property income; (ii) Higher non-taxable straight-lining adjustments on rental income for tenants of multi-tenanted

properties given rent-free period; and (iii) Higher profit expense arising from higher borrowings with higher average profit rates outstanding,

attributed by the issuance of the 2014 Trust Certificates to partly fund the Acquisition Property. Current YTD vs Prior YTD

Group

Statement of Total Return YTD Fav / (Unfav)

31/12/14 31/12/13

S$'000 S$'000 %

Gross revenue (a)

100,342 89,485 12.1


(27,396) (9,125) (200.2)

Net property income 72,946 80,360 (9.2)

Finance income 82 61 34.4

Finance costs (24,565) (20,310) (21.0)


(24,483) (20,249) (20.9)

Amortisation of intangible assets (1,383) (1,427) 3.1

Manager’s fees (6,173) (5,868) (5.2)

Trustee’s fees (520) (488) (6.6)


(54) (131) 58.8

Other trust expenses (e)

(1,225) (1,415) 13.4 Loss on conversion of Convertible Sukuk

(f) - (1,228) 100.0

Net income 39,108 49,554 (21.1)

Net change in fair value of financial derivatives (g)

5,298 1,393 280.3 Net change in fair value of investment properties

(h) (7,501) 12,441 (160.3)

Total return for the period before taxation and distribution

36,905 63,388 (41.8)

Tax expense * * -

Total return for the period before distribution 36,905 63,388 (41.8)

Distribution adjustments (i)

14,719 (1,633) NM

Income available for distribution (j)

51,624 61,755 (16.4)

NM denotes “not meaningful” *Less than S$1,000

Notes: (a) Gross revenue increased by 12.1% mainly due to the contribution of 508 Chai Chee Lane which was

acquired on 26 September 2013 and higher gross revenue from 151 Lorong Chuan, which was converted into multi-tenanted lease arrangement in 4Q 2013.

(b) Property expenses increased by 200.2% mainly due to:


Page 18

(i) Higher property tax, service, repairs, maintenance, utilities and applicable land rent expense, in line with the increase of directly managed multi-tenanted properties from two to seven since 26 November 2013; and

(ii) Lease management fees being charged to the 15 properties acquired during IPO, following the expiry of the three-year waiver period in 4Q 2013.

In line with the higher property expenses, net property income decreased by 9.2%.

(c) Net finance costs increased by 20.9% mainly due to:

(i) Non-recurring break costs and unamortised transaction costs being written off on prepayment of

borrowings and break fees on termination of the profit rate swaps associated with the Refinancing Exercises;

(ii) Higher profit expense arising from higher borrowings with higher average profit rates outstanding in Current YTD over Prior YTD, attributable to the drawdown of Revolving Existing CMF D to partly fund the acquisition of 508 Chai Chee Lane in 3Q 2013, and the issuance of the 2014 Trust Certificates to partly fund the Acquisition Property; and

(iii) Partially offset by lower profit expense arising from the lower weighted average principal amount of Convertible Sukuk outstanding in Current YTD over Prior YTD as a result of the conversion of principal amount of S$7.5 million of Convertible Sukuk in 2Q 2013.

(d) The decrease in donation of non-Shari’ah compliant income by 58.8% is mainly due to less income

generated from non-Shari’ah compliant activities subjected to cleansing in Current YTD over Prior YTD. (e) Other trust expenses were 13.4% lower mainly due to one-time professional and advisory fees incurred on

the establishment of the Programme in 2Q 2013 and partially offset by higher central registry service charges, consequent to the implementation of DRP, in Current YTD over Prior YTD.

(f) This represents the loss on conversion of aggregate principal amount of S$7.5 million of Convertible

Sukuk by Converting Sukukholders at the then conversion price of S$1.1933 during Prior YTD. There was no conversion of Convertible Sukuk during Current YTD.

(g) The higher net change in fair value of financial derivatives relates to the fair value change of the profit rate

swaps and the embedded derivatives component of the Convertible Sukuk recognised during the Current YTD and Prior YTD.

(h) Net change in fair value of investment properties during Current YTD and Prior YTD relates mainly to the

revaluation loss and revaluation surplus based on the independent valuations of the properties undertaken by the independent valuers as at 31 December 2014 and 31 December 2013 respectively.

(i) The favourable variance in distribution adjustments is mainly due to the higher net non-tax deductible

effects on the items stated in (f), (g) and (h) above and the non-recurring finance costs relating to the Refinancing Exercises as these items were adjusted back to derive the income available for distribution.

(j) Distributable income decreased by 16.4% during Current YTD over Prior YTD mainly due to the following

factors:

(i) Lower net property income; (ii) Higher non-taxable straight-lining adjustments on rental income for new tenants of multi-tenanted

properties given rent-free period; and (iii) Higher profit expense arising from higher borrowings with higher average profit rates outstanding,

attributable to the drawdown of Revolving Existing CMF D to partly fund the acquisition of 508 Chai Chee Lane in 3Q 2013, and the issuance of the 2014 Trust Certificates to partly fund the Acquisition Property.

9. Variance between forecast and the actual results The Manager has not disclosed any financial forecast to the market. However as indicated in the previous

quarter’s announcement dated 15 October 2014, the Manager remains committed in its efforts to improve the portfolio occupancy and continue to evaluate potential yield-accretive acquisition opportunities and also explore opportunities to divest underperforming assets to recycle Sabana REIT’s capital.


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10. Commentary on the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months.

Based on advanced estimates, the Singapore economy grew by 1.5% on a y-o-y basis in 4Q 2014, lower than the 2.8% registered in the previous quarter. For the whole of 2014, the economy is estimated to have grown by 2.8% which is in line with the government’s growth forecast of around 3.0%.

1

According to DTZ, Singapore industrial rental market for 2014 was stable, with average monthly rents for traditional industrial space increasing by 1.6% from 2013 to S$2 per sq ft. That was despite weak demand for conventional factory space in 4Q 2014, coupled with a big supply to existing stock that saw rents for the overall industrial property sector in Singapore fall during the quarter. That said, demand for space in business parks and high-tech industrial facilities continue to rise in 4Q 2014, as increase in office rents motivated some qualifying occupiers to seek more affordable options in office-industrial hybrid spaces.

2

DPU in 4Q 2014 has declined as compared to the same period last year as it continues to be affected by the conversion of 5 master tenanted properties into multi-tenanted properties. While the Manager anticipates market conditions to remain challenging, it will actively manage Sabana REIT’s lease expiry profile and continue to be aggressive in its marketing and leasing efforts to increase the Trust’s portfolio occupancy. The Manager will continue to prudently manage Sabana REIT’s capital structure by improving borrowings maturity profile and maintaining aggregate leverage below 40.0%. With approximately 10 months to go before the expiry of the 11 master leases, the Manager is working towards renewing or securing new master leases for 7 of them. The remaining 4 properties will likely be converted into multi-tenanted buildings. In addition, the Manager will continue to evaluate potential yield-accretive acquisition opportunities and also explore opportunities to divest underperforming assets to recycle Sabana REIT’s capital.

Sources: (1) “Singapore’s GDP Grew by 1.5 Per Cent in Fourth Quarter of 2014”. http://www.mti.gov.sg. Ministry of Trade and Industry Singapore. 2 January 2015. Web. 12 January 2015. (2) “Weak demand hits industrial rents, but business parks boom”. http://www.todayonline.com/print/991031. Channel News Asia. 6 January 2015. Web. 13 January 2015

11. Distributions (a) Current financial period

Any distribution declared for the current period: Yes

Name of distribution: Distribution for the fourth quarter ended 31 December 2014

Distribution Type: Taxable income distribution – 1.78 cents per unit

Par value of units: Not meaningful

Tax rate: Taxable Income

These distributions are made out of Sabana Shari’ah Compliant REIT’s taxable income. Unitholders receiving distributions will be assessable to Singapore income tax on the distributions received except for individuals where these distributions are exempt from tax.

Distributions made to individuals, irrespective of their nationality or tax residence status, who hold the units as investment assets will be tax exempt. However, distributions made to individuals who hold units as trading assets or through a partnership will be taxed at the level of these individuals at their applicable income tax rates.

All Unitholders who are not individuals are subject to Singapore income tax / withholding tax on distributions of Sabana Shari’ah Compliant REIT.

(b) Corresponding period of the immediately preceding financial year

Any distribution declared for the previous corresponding period: Yes Name of distribution: Distribution for fourth quarter ended 31 December 2013 Distribution Type: Taxable income distribution – 2.19 cents per unit


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Par value of units: Not meaningful Tax rate: Taxable Income

These distributions are made out of Sabana Shari’ah Compliant REIT’s taxable income. Unitholders receiving distributions will be assessable to Singapore income tax on the distributions received except for individuals where these distributions are exempt from tax.

Distributions made to individuals, irrespective of their nationality or tax residence status, who hold the units as investment assets will be tax exempt. However, distributions made to individuals who hold units as trading assets or through a partnership will be taxed at the level of these individuals at their applicable income tax rates.

All Unitholders who are not individuals are subject to Singapore income tax / withholding tax on distributions of Sabana Shari’ah Compliant REIT.

(c) Date Payable: 27 February 2015 (d) Books Closure Date: 29 January 2015 12. If no distribution has been declared/ (recommended), a statement to that effect

Not applicable.

13. Distribution policy

Sabana Shari’ah Compliant REIT’s current distribution policy is to distribute 100% of its distributable income to Unitholders. Distributions are usually made on a quarterly basis at the discretion of the Manager.

14. General mandate relating to interested person transactions

The Trust has not obtained a general mandate from Unitholders for interested person transactions. Part II – ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT

15. Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer’s most recently audited annual financial statements, with comparative information for the immediate preceding year.

Group

Total Gross Revenue by property types YTD Fav / (Unfav) 31/12/14 31/12/13

S$'000 S$'000 %

High-tech Industrial 62,872 51,837 21.3 Chemical Warehouse & Logistics 9,140 9,140 - Warehouse & Logistics 19,498 19,359 0.7 General Industrial 8,832 9,149 (3.5)

100,342 89,485 12.1

Group

Total Net Property Income by property types YTD Fav / (Unfav) 31/12/14 31/12/13

S$'000 S$'000 %

High-tech Industrial 38,548 44,138 (12.7) Chemical Warehouse & Logistics 8,836 8,929 (1.0) Warehouse & Logistics 18,648 18,827 (1.0)

General Industrial 6,914 8,466 (18.3)

72,946 80,360 (9.2)


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16. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments. Please refer to Section 8 for the review of the actual performance. 17. Breakdown of sales as follows:-

Group

YTD Fav / (Unfav) 31/12/14 31/12/13

S$'000 S$'000 %

(a) Gross revenue reported for first half year 49,924 43,063 15.9

(b) Total return after tax before distribution for first half year 23,296 24,670 (5.6)

(c) Gross revenue reported for second half year 50,418 46,422 8.6

(d) Total return after tax before distribution for second half year 13,609 38,718 (64.9)

18. A breakdown of the total annual distribution for the latest full year and its previous full year:-

Group

YTD

31/12/14 31/12/13

S$'000 S$'000

In respect of the period/quarter from:

1 October 2014 - 31 December 2014 (a)

12,891 -

1 July 2014 - 30 September 2014 12,664 -

1 April 2014 - 30 June 2014 12,965 -

1 January 2014 - 31 March 2014 13,031 -

1 October 2013 - 31 December 2013 - 15,154

24 September - 30 September 2013 - 533

1 July 2013 - 23 September 2013 - 15,004

1 April 2013 - 30 June 2013 - 15,593

1 January 2013 - 31 March 2013 - 15,482

51,551 61,766

Note: (a) Refer to distribution for the quarter from 1 October 2014 to 31 December 2014 on item 11(a) on Page 19. 19. Disclosure of person occupying a managerial position in the issuer or any of its principal

subsidiaries who is a relative of a director or chief executive officer or substantial shareholder of the issuer pursuant to Rule 704(13) in the format below. If there are no such persons, the issuer must make an appropriate negative statement.

Pursuant to Rule 704(13) of the Listing Manual of the Singapore Exchange Securities Trading Limited,

Sabana Real Estate Investment Management Pte. Ltd. (the "Company"), being the manager of the Trust, confirms that there is no person occupying a managerial position in the Company, the Trust or any of the Trust’s subsidiaries, who is a relative of a director, chief executive officer, substantial shareholder of the Company or substantial unitholder of the Trust.


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On behalf of the Board of Directors of Sabana Real Estate Investment Management Pte. Ltd. (Company registration number 201005493K) as Manager of Sabana Shari’ah Compliant Real Estate Investment Trust Steven Lim Kok Hoong Kevin Xayaraj Director Director By Order of the Board Chang Ai Ling Company Secretary Sabana Real Estate Investment Management Pte. Ltd. (Company registration number 201005493K) as Manager of Sabana Shari’ah Compliant Real Estate Investment Trust 21 January 2015

This release 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 announcement between the listed amounts and total thereof are due to rounding.

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SABANA SHARI’AH COMPLIANT REIT FINANCIAL STATEMENTS …sabana.listedcompany.com/newsroom/20150121_191010_M1GU_ZZ… · 1 JANUARY 2014 TO 31 DECEMBER 2014 ... Industrial Real Estate