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Soilbuild Business Space REIT’s Latest Result — DPU Sank By 9.5%

On Wednesday, Soilbuild Business Space REIT (SGX: SV3U) released its 2019 first-quarter earnings update. As a quick introduction, Soilbuild Business Space REIT invests primarily in business parks and industrial properties in Singapore and Australia.

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

  1. Gross revenue for the reporting quarter grew by 16.6% year on year to S$22.7 million, while net property income improved by 7.7% to S$18.3 million.
  2. Yet, distribution per unit (DPU) sank by 9.5% to 1.198 Singapore cents.
  3. Based on Soilbuild Business Space REIT’s annualized DPU of 4.792 Singapore cents and its closing unit price of S$0.62 (as of writing), the latest distribution translates to a yield of 7.7%.
  4. As of 31 March 2019, Soilbuild Business Space REIT’s gearing stood at 39.3%, which is a safe distance from the regulatory ceiling of 45%.
  5. The REIT’s portfolio has a committed occupancy rate of 89.0% at the end of the quarter.
  6. The weighted average lease expiry (by gross rental income) stood at 3.7 years as of 31 March 2019. 69.0% of the REIT’s leases are expiring in the next five years, with the remaining 31.0% expiring from 2023 onwards.
  7. Soilbuild Business Space REIT’s overall rental reversion rate for the reporting quarter was a poor negative 3.3%.
  8. In March 2019, the manager announced the proposed divestment of 72 Loyang Way to an unrelated third party for a sale consideration of S$34.08 million.
  9. Here’s a summary of the outlook for Soilbuild Business Space REIT:

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.