Soilbuild Business Space REIT’s Latest Earnings Update: Distribution Sinks 13.8%

On Monday, Soilbuild Business Space REIT (SGX: SV3U) released its 2018 second quarter earnings update.

As a quick introduction, Soilbuild Business Space REIT invests primarily in business parks and industrial properties in Singapore. The REIT’s portfolio has properties such as Solaris, West Park BizCentral, Eightrium @ Changi Business Park, and more.

Here are eight things investors should know about Soilbuild Business Space REIT’s latest results:

1. Gross revenue for the reporting quarter declined by 13.1% year-on-year to S$18.7 million while net property income fell by 13.2% to S$16.2 million. The REIT attributed its lower revenue to lower contributions from two properties (72 Loyang Way and West Park BizCentral), and the absence of income due to the sale of the KTL Offshore property in February 2018.

2. Similarly, distribution per unit (DPU) sank by 13.8% to 1.264 cents.

3. Based on Soilbuild Business Space REIT’s annualized DPU of 5.176 cents (from its DPU of 2.588 cents in the first half of 2018), and its closing unit price of S$0.65 as of 17 July 2018, the latest distribution translates to a yield of 7.8%.

4. As of 30 June 2018, Soilbuild Business Space REIT’s gearing stood at 37.6%, which is coming close to the regulatory gearing ceiling of 45%.

5. The REIT’s portfolio has a committed occupancy rate of 87.5% at the end of the quarter.

6. The weighted average lease expiry (by gross rental income) stood at 2.9 years as of 30 June 2018. 67.3% of the REIT’s leases (again by gross rental income) are expiring between 2018 and 2021, with the remaining 32.7% expiring from 2022 onwards.

7. Soilbuild Business Space REIT’s overall rental reversion rate for the reporting quarter was poor at -11.9%.

8. Here’s a succinct summary of the outlook that Soilbuild Business Space REIT has on its own business:

Source: Soilbuild Business Space REIT earnings presentation

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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.