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Soilbuild Reit posts Q1 DPU of 1.198 Singapore cents

SOILBUILD Business Space Reit on Wednesday declared a distribution per unit (DPU) of 1.198 Singapore cents for the first quarter ended March 31, down 9.5 per cent from 1.324 cents a year ago as expense increases outpaced revenue growth.

The Reit saw higher gross revenue for the quarter of S$22.68 million, up 16.6 per cent year-on-year from S$19.45 million. This was mainly due to the conversion of Solaris into a multi-tenanted property on Aug 15 and contributions from two Australian properties.

Net property income also improved 7.7 per cent to S$18.29 million from S$16.99 million.

The fall in DPU and income attributable to unitholders was mainly due to property operating expenses, finance expenses, other trust expenses and perpetual securities coupons growing at a faster pace than revenue. Income attributable to unitholders fell 8.7 per cent to S$12.74 million from S$13.96 million in Q1 2018.

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Portfolio occupancy rate declined slightly to 89 per cent in the first quarter from 89.5 per cent in Q4 2018. The Reit's manager completed more than 99,000 square feet of renewals and secured approximately 76,000 sq ft of new leases in the quarter.

For the first quarter, the balance of expiring leases by portfolio net lettable area was 7.7 per cent.

In March, the Reit's manager announced that it has proposed to divest 72 Loyang Way to an unrelated third party for S$34.08 million. The transaction is subject to JTC's approval.

"We have announced the proposed divestment of 72 Loyang Way as part of our capital-recycling efforts and are pleased to have waived the manager's divestment fee for this DPU-accretive divestment," said Roy Teo, CEO of the Reit's manager.

"We have also demonstrated proactive capital management by refinancing two loans ahead of maturity in Q1 2019 and now have no refinancing requirement until FY2021. Our focus in FY2019 will be to enhance our operational performance and prudently evaluate further growth opportunities in Australia to achieve sustainable returns for our unitholders," he added.

Soilbuild Reit closed up 0.5 Singapore cent or 0.79 per cent to S$0.635 on Wednesday before the results were released.