Revaluation losses pull Soilbuild Reit's Q4 2016 DPU down by 2.7%

SOILBUILD Business Space Reit reported a 2.7 per cent drop in distribution per unit (DPU) to 1.570 Singapore cents for its fourth quarter ended Dec 31, 2016, down from 1.614 cents a year ago.

The drop was mainly due to revaluation losses amounting to a S$50.9 million, even though the Reit reported stronger gross revenue and net property income for the fourth quarter, its manager said in a Monday release after market close.

Gross revenue rose 6.1 per cent in Q4 to S$21.7 million, while the full-year figure was at S$81.1 million, some 2.3 per cent higher.

Net property income was 8 per cent higher in Q4, at S$18.9 million, while 2016 saw a full-year 4.3 per cent increase at S$70.7 million.

However, Soilbuild Reit reported deficits in total returns before distribution for Q4 2016 and FY 2016 amounting to S$37.5 million and S$0.6 million respectively.

This was mainly due to revaluation losses of S$50.9 million on its investment properties, attributed largely to Loyang Way, West Park, Tuas Connection and Eightrium.

"The decline in valuation of Loyang Way was mainly due to the termination of the lease with TOE whereas the decline in the valuation of West Park and Tuas Connection was mainly attributed to higher vacancies and negative rental reversions," it said.

Thus, the Reit's 2016 full-year DPU fell to 6.091 cents, or 6.1 per cent lower than 6.487 cents in 2015.

The Reit's counter moved 0.5 Singapore cent, or 0.76 per cent, lower to S$0.65 on Monday before the announcement.