Soilbuild Reit mulls options for Pioneer Sector site on rental arrears woes

SOILBUILD Business Space Reit, which faces mounting rental arrears by one of its top tenants, is weighing its options for the property at 2, Pioneer Sector 1.

The trust could lease the premises to third parties, or embark on asset enhancement to increase the gross floor area, the manager said on Friday, in an update on the unpaid rent.

Chemical company NK Ingredients, which contributed 6.3 per cent of the trust's revenue for the three months to June 30, has not paid its rent for the month and now owes some S$2.84 million in rent and property tax, according to Soilbuild Reit's manager.

With the 572,529 square foot land parcel having a plot ratio of 0.55 - below the permissible maximum of 1 - the manager said that "it is concurrently exploring future options" for the site.

A separate creditor's judicial management application for NK Ingredients is expected to be heard in August, the manager added. It said that it would continue to monitor the status of the application "to achieve the best recovery of the rental arrears".

Under the judicial management application, legal proceedings cannot be started or carried out against NK Ingredients for now, the manager has previously said.

The manager noted that, had the tenant not met its lease obligations in the second quarter, Soilbuild Reit could have seen its distribution per unit (DPU) fall 11.6 per cent if it could not lease out the space. The Reit in fact paid out a DPU of 1.179 Singapore cents.

The counter shed S$0.01 or 1.67 per cent to S$0.59 on Friday before the announcement.