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Soilbuild Business Space REIT Reports A 9.4% Decline In Distributions In Its Latest Earnings Update

On Wednesday, Soilbuild Business Space REIT (SGX: SV3U) released its 2018 third quarter earnings update. As a quick introduction for better context later, Soilbuild Business Space REIT invests primarily in business parks and industrial properties in Singapore. The REIT’s portfolio in Singapore includes properties such as Solaris, West Park BizCentral, Eightrium @ Changi Business Park, and more.

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

1. Gross revenue for the reporting quarter declined by 3.6% year-on-year to S$19.8 million while net property income fell by 8.8% to S$16.2 million.

2. Similarly, distribution per unit (DPU) sank by 9.4% to 1.245 cents.

3. Based on Soilbuild Business Space REIT’s annualized DPU of 5.11 cents (from its actual DPU of 3.833 cents for the first nine months of 2018), and its closing unit price of S$0.58 as of 18 October 2018, the latest distribution translates to a yield of 8.8%

4. As of 30 September 2018, Soilbuild Business Space REIT’s gearing stood at 39.2%, which is getting close to the regulatory gearing ceiling of 45%.

5. The REIT’s portfolio has a committed occupancy rate of 87.2% at the end of the quarter, which is a decline both sequentially (from 87.6%) and from a year ago (from 94.1%).

6. The weighted average lease expiry (by gross rental income) was 3.2 years as of 30 September 2018. 62.3% of the REIT’s leases (again by gross rental income) are expiring between 2018 and 2021, with the remaining 37.8% expiring from 2022 onwards.

7. Soilbuild Business Space REIT’s overall rental reversion rate for the reporting quarter was 2.7%. Rental reversions of 3.6% and -2.4% were recorded for renewals (including forward renewals) and new leases, respectively.

8. In October 2018, Soilbuild REIT acquired a centrally-located office in Australia’s Canberra city (14 Mort Street) and a poultry processing plant in Adelaide (Inghams Burton) for A$120.96 million (S$120.96 million) in total.

9. Here’s a succinct outlook that Soilbuild Business Space REIT shared about its own business in its latest earnings update:

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.