BRIEF: Facing falling rents, SF REIT lowers payout ratio

Logistics warehousing-focused REIT SF Real Estate Investment Trust (2191.HK) on Thursday reported its revenue grew 2.4% year-on-year to HK$450 million ($58 million) in 2024. It announced a final distribution per unit of HK$0.1269, bringing its full-year distributions to HK$0.274 per unit, down 4.4% from 2023 levels. 

The reduced payout was the result of a lower payout ratio, which dropped to 90% in the second half of last year. That brought the full-year payout ratio to 95%, compared with 100% in 2023. Management said in a challenging leasing market, it is reasonable for a company to preserve capital to navigate operational headwinds. 

SF Reit’s portfolio valuation fell 8.9% year-over-year in 2024 to HK$6.73 billion as the company faced falling rents. The REIT outlined countermeasures it is taking, including accelerated refinancing timelines, negotiations to reduce borrowing costs, and extensions of interest rate swap contract durations. Shares of the REIT opened down 5% at HK$3.05 on Friday.

By Lau Chi Hang

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