Soilbuild Reit Q4 DPU up 29.1% to 1.194 Singapore cent

SOILBUILD Business Space Reit on Thursday posted a fourth-quarter distribution per unit (DPU) of 1.194 Singapore cents, up 29.1 per cent from 0.925 cent a year ago.

Roy Teo, chief executive officer of the Reit manager said that the Q4 DPU is "not indicative of the Reit's future performance" as it includes two quarters of contribution from its Australia portfolio.

"In the year ahead, the manager will continue to focus on building a more resilient portfolio through asset enhancements and tenant mix restructuring," he said.

Distributable income rose 30.2 per cent to S$15.2 million for the three-month period ended Dec 31, 2019.

Gross revenue was up 5.4 per cent to S$24.1 million after contributions from 25 Grenfell Street and West Park BizCentral.

The increase in revenue, however, was partially offset by lower contribution from 2 Pioneer Sector 1, which is under redevelopment, and 72 Loyang Way, which was divested in April 2020.

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Net property income climbed 10.1 per cent S$19.2 million, largely due to contributions from 25 Grenfell Street and West Park BizCentral.

Net asset value (NAV) per unit was S$0.55 as at Dec 31, 2020, lower than the NAV per unit of S$0.59 as at Dec 31, 2019.

Portfolio occupancy stood at 94.3 per cent in the fourth quarter, from 92.9 per cent the previous quarter.

Negative rental reversion of 24.5 per cent was recorded for new leases, attributed mainly to the signing of a lease with an anchor tenant at 39 Senoko Way and positive rental reversion of 1.3 per cent was recorded for lease renewals.

Weighted average lease expiry by net lettable area and gross rental income stood at 2.8 and 3.2 years respectively.

The Reit recorded a revaluation loss of S$58.1 million on its investment properties, attributed primarily to revaluation losses for 2 Pioneer Sector 1, Solaris, West Park BizCentral, Eightrium, Bukit Batok Connection and was partially offset by revaluation gain for Inghams Burton.

"As the Covid-19 pandemic has brought uncertainty to property markets, the assessed portfolio valuations may change more rapidly than usual," said the Reit's manager in a statement.

The Reit's weighted average borrowing cost fell marginally to 3.12 per cent per annum. Weighted average debt maturity was 1.5 years, with a fixed interest rate for 78.7 per cent of borrowings.

Soilbuild Reit has approximately S$29 million committed, undrawn loan facilities. The manager is in advanced discussions with various lenders on refinancing of debt due in the next one year.

The Reit's unencumbered investment properties were in excess of S$960 million, representing approximately 72 per cent of its portfolio by value. Aggregate leverage stood at 38.9 per cent as at Dec 31, 2020.

Mr Teo said: "While the phased re-opening of the economy bodes well for landlords, it will take sometime for the industrial manufacturing activities to achieve pre-Covid levels.

"Space demands from business park users remain uncertain as more employers adopt flexible work arrangements, in particular working from home to provide work-life balance for employees," he said.

Units of the Reit ended Thursday at 53.5 Singapore cents, down half a cent or 0.9 per cent.