The manager of Soilbuild REIT has reported distribution per unit (DPU) of 1.194 cents for the 4QFY2020 ended December, 29.1% higher than DPU of 0.925 cents in 4QFY2019.
Gross revenue for the quarter was up 5.4% y-o-y to $24.1 million due to the higher revenue contributions from 25 Grenfell Street and West Park BizCentral. The higher revenue was partially offset by lower contribution from 2 Pioneer Sector 1, which is under redevelopment and 72 Loyang Way, which was divested in April 2020.
Quarter-on-quarter (q-o-q), 4QFY2020 gross revenue rose 5.1% due to lesser net rent rebates.
4QFY2020 property operating expenses fell 10.1% y-o-y to $4.8 million due to the reversal of the provision of rent waivers, lower expenses for 2 Pioneer Sector 1 and 72 Loyang Way and lower expenses for Tuas Connection, Solaris and Eightrium. The lower expenses were partly offset by higher expenses incurred for 25 Grenfell Street.
As a result, net property income (NPI) stood 10.1% y-o-y higher at $19.2 million, mainly due to a full quarter of revenue contribution from 25 Grenfell Street.
NPI fell 2.7% q-o-q due to the reversal of excess provision for net rent waivers in 3QFY2020.
NPI margin grew 3.5 percentage points to 79.9% to the improvement in NPI margins for several multi-tenanted properties such as 25 Grenfell Street and Tuas Connection.
Income attributable to unitholders for the quarter thus grew 30.2% y-o-y to $15.2 million.
DPU for the FY2020 fell 7.1% y-o-y to 3.922 cents over 1.27 billion units, compared to DPU of 4.22 cents in FY2019 over 1.26 billion units.
FY2020 gross revenue rose 4.9% y-o-y to $93.4 million due to higher contribution from 25 Grenfell Street, and offset by lower revenue from 2 Pioneer Sector 1, Tuas Connection and Solaris.
FY2020 property operating expenses increased 16.1% y-o-y to $20.9 million due to higher expenses for 25 Grenfell Street and provision for rent waivers.
NPI for FY2020 grew 2.1% y-o-y to $72.5 million mainly due to the acquisition of 25 Grenfell Street in November 2019.
NPI margin for the full year fell by 2.1 percentage points to 77.6% due to the provision of rent waivers and lower NPI margin for 2 Pioneer Sector 1 and the acquisition of 25 Grenfell Street.
Portfolio occupancy as at Dec 31, 2020 rose 1.4 percentage points q-o-q to 94.3%. The weighted average lease expiry (WALE) by net lettable area (NLA) and gross rental income (GRI) stood at 2.8 and 3.2 years respectively.
In FY2021, 21.5% or approximately 817,000 sqft of the portfolio’s NLA is due for renewal.
As at Dec 31, 2020, cash and cash equivalents stood at $16.4 million.
“Despite the difficult environment, we are pleased to report a 1.4 percentage point uplift in occupancy q-o-q after having obtained JTC’s approval in December 2020 for the lease of 39 Senoko Way to an anchor tenant,” says Roy Teo, CEO of the manager.
“While the phased re-opening of the economy bodes well for landlords, it will take some time for the industrial manufacturing activities to achieve pre-Covid levels. Space demands from business park users remain uncertain as more employers adopt flexible work arrangements, in particular working from home to provide work-life balance for employees.”
“We would like to emphasise that the 4QFY2020 DPU is not indicative of the REIT’s future performance as it includes two quarters of contribution from our Australia portfolio. In the year ahead, the manager will continue to focus on building a more resilient portfolio through asset enhancements and tenant mix restructuring,” Teo adds.
Units in Soilbuild closed 0.5 cent lower or 0.9% down at 53.5 cents on Jan 21.
