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3 Things Investors Should Know About Viva Industrial Trust’s Latest 2016 Results

Viva Industrial Trust (SGX: T8B) is a stapled trust that consists of a real estate investment trust and business trust. Right now, the stapled trust’s portfolio consists of nine business park and industrial properties in Singapore.

In late January, Viva Industrial Trust reported its 2016 full year results. Let’s take a look at three useful pieces of information from the announcement:

1. The overall result

The table below shows some important numbers from the trust’s income statement for the quarters and years ended 31 December 2015 and 2016:

Viva Industrial Trust 2016 income statement
Source: Viva Industrial Trust 2016 full year earnings release

For the whole of 2016, despite acqusitions resulting in growth in gross revenue, net property income, and distributable income, Viva Industrial Trust’s distribution per stapled security (DPS) for the year is down slightly when compared to 2015.

That’s because the trust’s more recent acqusitions have been funded by issuing new stapled securities, thereby leading to a marginally lower DPS.

2. Trend of occupancy rates

Here’s a chart showing changes to the occupancy rate of Viva Industrial Trust’s portfolio since the fourth quarter of 2013:

Viva Industrial Trust 2016 occupancy rate chart
Source: Viva Industrial Trust 2016 full year earnings presentation

It is a known fact that many REITs that focus on Singapore industrial properties are facing challenges due to downward pressure on occupancy rates and rentals.

So, it is interesting to know from Viva Industrial Trust’s 2016 full year earnings presentation that its occupancy rate has been stepping up steadily since the fourth quarter of 2013. The trust ended 2016 with a portfolio occupancy rate of 89.8%, up from end-2015’s 87%.

3. Outlook for 2017

As investors, we rely on many tools, including management’s forecasts, to help us gain insight on what to expect for the near to long term performance of our investments’ business.

With regard to Viva Industrial Trust, this is what the trust’s Manager has to say about its future in its 2016 full year earnings release:

“We are excited to see the transformation of VBP [Viva Business Park] nearing completion, as it symbolises the maturity of VIT as one of the leading industrial REITs in Singapore offering the best-in-class income-producing portfolio.

As the government embarks on its industry transformation programme to push Singapore into becoming a smart nation, we continue to see opportunities for both organic and inorganic growth in Singapore’s industrial property landscape.”

In short, Viva Industrial Trust is expecting a resilient performance from its portfolio despite the challenges seen with the industrial properties market.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.