DMG Research said on Thursday that February's property sales numbers 'surprised on the upside', with a total of 2,413 units sold by developers in the month.

Analysts see value diminishing in the sector with revised net asset value discount on developers narrowing.

'We also remain less sanguine as stronger than expected continued price appreciation may in turn raise policy risks, leading to sustained sector re-rating unlikely,' said DMG analysts.

The research house remains neutral on developers but reiterates its sell recommendation on SC Global due to low asset turnover and high leverage.

Additionally, suburban retail Reits such as CapitaMall Trust and Frasers Centrepoint Trust are now looked upon more favourably.

Summary: Industrial REITs have proven its defensive nature YTD, having generally outperformed both the broader REIT sector and STI. On the operational level, they also put up a strong showing. Going into 2012, we expect the industrial REITs to adopt a more cautious stance on their acquisition plans. On a brighter note, despite the lower expected investments, we still anticipate industrial REITs to rake up a good set of financial performance in 2012, thanks to their proactive approaches on investment/ asset enhancement activities over the past year, built-in rental escalations and possibly further positive rental reversions. We continue to maintain our OVERWEIGHT view on the industrial-REITs subsector. Industrial REITs, we note, offer one of the highest DPU yields in the REIT space. This is in addition to the relative stability and earnings visibility in their portfolio, backed by longer term leases, diversified tenant base and security deposits. In addition, they now have stronger financial positions and greater access to capital, unlike the difficult times seen in the global financial crisis. We maintain our BUYs for A-REIT and MLT, and single out CACHE as the preferred pick for this subsector.

Sabana Reit to buy 21 Joo Koon Crescent for about $20.3m

Sabana Shari'ah Compliant Industrial Real Estate Investment Trust is proposing to buy 21 Joo Koon Crescent, a three-storey factory building with ancillary office, for $20.274 million from AVA Global.

Under the sale and leaseback deal, the seller will upon completion of the sale, take a master lease of the entire premises for a four-year term on a triple net basis. Sabana Reit's manager intends to fund the acquisition by debt.

This acquisition, along with the proposed acquisitions of 39 Ubi Road 1, 3A Joo Koon Circle and 2 Toh Tuck Link, announced earlier will see the Reit's aggregate leverage (gross borrowings divided by total deposited property value) rise to 35 per cent from 25.1 per cent at June 30, 2011.

21 Joo Koon Crescent is a JTC leasehold estate of 30+30 years tenure starting from Feb 16, 1994, with a remaining tenure of about 43 years. The proposed transaction is subject to approval from JTC, among other conditions.

Sabana Real Estate Investment Management Pte Ltd announced on Monday that Sabana Shari'ah Compliant Industrial Real Estate Investment Trust (Sabana Reit) has entered into two sale and purchase agreements to acquire two properties to diversify its income stream.

In the first acquisition, Sabana Reit will purchase a 217,580 sqft property along Joo Koon Circle from Ringford Pte Ltd for S$40.2 million. Comprising of a two-storey building with mezzanine floor and a three-storey factory building, the property is a JTC leasehold estate with a remaining tenure of 36.3 years.

The second property, also a JTC leasehold estate with 45.3 years remaining on the lease, carries a purchase consideration of S$39.8 million from Winfred Pte Ltd, and is a six-storey warehouse along Toh Tuck Link occupying 180,735 sqft.

Both properties are being sold on a sale and lease basis wherein Sabana Reit will upon completion of the acquisition, take master lease of the entire premises for a term of three years on a triple net basis.

Sabana Reit has paid a 1 per cent deposit for each property and the acquisitions, completely funded by debt, are expected to be completed by the fourth quarter of 2011

RECEIPT OF APPROVAL IN-PRINCIPLE
FOR PRIVATE PLACEMENT OF 12,195,122 NEW UNITS IN AIMS AMP CAPITAL INDUSTRIAL REIT TO CWT LIMITED

AIMS AMP Capital Industrial REIT Management Limited, as manager of AIMS AMP Capital Industrial REIT (“AIMSAMPIREIT”, and the manager of AIMSAMPIREIT, the “Manager”), is pleased to announce that further to its announcements dated 26 July 2011 and 15 August 2011 in relation to, among others, the private placement of 12,195,122 new units in AIMSAMPIREIT (the “Placement Units”) to CWT Limited (“CWT”) or its subsidiary (the “CWT Private Placement”), the Manager has today obtained the approval in-principle from Singapore Exchange Securities Trading Limited (the “SGX-ST”) for the listing of, dealing in, and quotation on the Main Board of the SGX-ST of, the 12,195,122 Placement Units to be issued pursuant to the CWT Private Placement at an issue price of S$0.205 per Placement Unit.

The Placement Units are expected to be issued to CWT on 5 September 2011. Subject to applicable laws and regulations, the Manager intends to use the entire gross proceeds of S$2,500,000.01 from the CWT Private Placement for working capital and general corporate purposes of AIMSAMPIREIT. The SGX-ST’s approval in-principle is subject to, inter alia, compliance with the SGX-ST’s listing requirements.

The SGX-ST’s approval in-principle is not to be taken as an indication of the merits of the CWT Private Placement, the Placement Units, AIMSAMPIREIT and/or its subsidiaries.