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9 Things to Know About Soilbuild Business Space REIT’s Latest Earnings

Soilbuild Business Space REIT (SGX: SV3U) is a real estate investment trust (REIT) that owns a total of 12 business parks and industrial properties in Singapore. Its portfolio of properties includes Solaris, Eightrium @ Changi Business Park, Tuas Connection, and Bukit Batok Connection.

On Friday evening, the REIT announced its financial results for the third quarter ended 30 September 2017 (3Q2017). The reporting period was from 1 July 2017 to 30 September 2017.

Here are nine things investors should know about from the earnings announcement:

1. Gross revenue grew 4.1% year-on-year to S$20.5 million while net property income (NPI) rose 3% to S$17.8 million. The growth was mainly due to higher revenue from Bukit Batok Connection, West Park BizCentral, Solaris, Tuas Connection and Tellus Marine, partially offset by a reduction in income from 72 Loyang Way.

2. Despite the rise in gross revenue and NPI, income available for distribution for the quarter was 0.8% lower at S$14.4 million. This was on the back of lower non-tax deductible items, which was slightly offset by higher total return before distribution.

3. Distribution per unit slipped 1.8% to 1.374 cents due to a higher number of units in 3Q2017.

4. The net asset value per unit was S$0.71, as at 30 September 2017.

5. Gearing ratio of the REIT stood at 37.9% while the average all-in interest cost was 3.32% per annum.

6. The REIT has a fixed interest rate for 63.9% of borrowings with a weighted average term of 1.5 years. It has no refinancing requirements till 2018.

7. The portfolio occupancy rate increased to 94.1%, the third consecutive quarter-on-quarter growth. The improved rate was contributed by higher occupancy at West Park BizCentral and 72 Loyang Way.

8. A negative rental reversion of 4% was recorded for new and renewal leases in 3Q2017.

9. Year-to-date, more than 710,000 square foot of new leases, renewals and forward renewals have been completed, amounting to 18.2% of the portfolio. This leaves around 5.9% of the portfolio net lettable area expiring in 4Q2017.

The REIT closed at S$0.705 on Friday. This gives a price-to-book ratio of close to 1 and a trailing distribution yield of 8.4%.

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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 Sudhan P doesn’t own shares in any companies mentioned.