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Soilbuild Reit posts 11.9% drop in Q4 DPU

SOILBUILD Business Space Reit reported a 11.9 per cent drop in distribution per unit (DPU) for the fourth quarter ended Dec 31, 2017 to 1.383 Singapore cents.

This came as gross revenue and net property income (NPI) fell by 4.3 per cent to S$20.75 million and 6 per cent to S$17.75 million, respectively, mainly due to lower contribution from 72 Loyang Way.

For the full year ended Dec 31, 2017, Soilbuild Reit's revenue grew 4.5 per cent to S$84.82 million and NPI rose 4 per cent to S$73.48 million largely due to the full-year contribution from Bukit Batok Connection, a property acquired in September 2016.

But full-year DPU still slipped 6.2 per cent to 5.712 cents on the back of lower distributable income and an enlarged units base.

Roy Teo, CEO of the Reit manager said: "The portfolio continues to face headwinds from the oversupply of industrial space in Singapore. In the short term, our focus is to maintain the portfolio occupancy level which may require us to compromise on rental rates."

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Occupancy rate of the portfolio stood at 92.7 per cent as at the end of the fourth quarter, compared to 89.6 per cent a year ago.

The Reit manager completed some 120,000 sq ft of renewals and forward renewals in the fourth quarter and secured about 90,000 sq ft of new leases despite the soft leasing environment.

For the full year, the Reit manager completed more than 920,000 sq ft of new leases, renewals and forward renewals, amounting to 23.7 per cent of the portfolio.

Negative rental reversion of 15.7 per cent and 9.2 per cent was recorded for new and renewal leases in the fourth quarter and fiscal 2017, respectively. Weighted average lease expiry by net lettable area and gross rental income stood at 3.1 and 3 years, respectively.

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