SINGAPORE (Jan 17): The manager of Soilbuild Business Space REIT (Soilbuild REIT) announced a DPU of 1.383 cents for the 4Q17 ended Dec. This was 11.9% lower compared to 4Q16 DPU of 1.57 cents.
SB REIT Management says gross revenue and net property income (NPI) fell by 4.3% to $20.7 million and 6.0% to $17.8 million respectively mainly due to lower contribution from 72 Loyang Way.
For FY17 ended Dec, Soilbuild REIT’s revenue and NPI grew 4.5% to $84.8 million and 4.0% to $73.5 million respectively largely due to the full year contribution from Bukit Batok Connection, a property acquired in September 2016. FY17 distribution income fell 0.5% to $59.9 million while DPU fell 6.2% to $5.7 million.
Occupancy rate stood at 92.7% in 4Q17. SB REIT Management successfully completed 120,000 sf of renewals and forward renewals in the quarter and secured 90,000 sf of new leases despite the soft leasing environment. Year to date, the manager has completed more than 920,000 sf of new leases, renewals and forward renewals, amounting to 23.7% of the portfolio.
Negative rental reversion of 15.7% and 9.2% was recorded for new and renewal leases in 4Q17 and FY17 respectively. Weighted average lease expiry by net lettable area and gross rental income stands at 3.1 and 3.0 years respectively.
In 4Q17 and FY17, Soilbuild REIT’s weighted average borrowing cost was 3.20% p.a. and 3.31% p.a. respectively. As at end Dec, its weighted average debt expiry stood at 2.7 years and interest rate exposure was 70.1% fixed for the next 1.4 years.
In December 2017, SB REIT Management announced the proposed divestment of 61 and 71 Tuas Bay Drive (KTL) to SB (Pioneer) Investment, a wholly-owned subsidiary of Soilbuild REIT’s sponsor for $55.0 million. The manager expects the proposed divestment, subject to unitholders’ approval, to be completed in 1Q 2018.
In its outlook, Roy Teo, CEO of SB REIT Management, says its portfolio continues to face headwinds from the oversupply of industrial space in Singapore.
"In the short term, our focus is to maintain the portfolio occupancy level which may require us to compromise on rental rates."
Units in Soilbuild REIT closed 1 cent lower at 70 cents.
