Soilbuild REIT posts 9.5% drop in 1Q DPU to 1.198 cents despite higher revenue
SINGAPORE (Apr 17): The manager of Soilbuild Business Space REIT (Soilbuild REIT) has announced distribution per unit (DPU) of 1.198 cents for the 1Q19 ended March, some 9.5% lower than DPU of 1.324 cents a year ago.
Income attributable to unitholders fell 8.7% to $12.7 million in 1Q19, from $14.0 million a year ago.
The manager says that this was due to property operating expenses, finance expenses, other trust expenses and perpetual securities coupons outpacing an increase in revenue.
1Q19 gross revenue rose 16.6% to $22.7 million, from $19.4 million a year ago.
The increase was mainly due to the conversion of Solaris into a multi-tenanted property and contribution from two Australia properties – Inghams Burton and 14 Mort Street.
This was partially offset by absence of revenue from a property known as KTL Offshore following the divestment of KTL Offshore in February 2018 and lower contribution from West Park BizCentral, Eightrium and 72 Loyang Way.
Property operating expenses jumped 76% to $4.4 million in 1Q19, mainly due to higher property expenses incurred for Solaris and 14 Mort Street.
Consequently, net property income was 7.7% higher at $18.3 million, compared to $17.0 million a year ago.
Portfolio occupancy rate declined slightly to 89.0% in 1Q19, from 89.5% in 4Q18.
Weighted average lease expiry (WALE) by net lettable area and gross rental income stood at 3.6 and 3.7 years, respectively.
Soilbuild REIT manager says negative rental reversion of 2.5% and 4.0% was recorded for renewals and new leases respectively in 1Q19. A balance of 7.7%, or approximately 308,239 sq ft, of the portfolio’s net lettable area is due for renewal for the rest of 2019.
As at end March, cash and cash equivalents stood at $17.5 million.
Looking ahead, the manager says the proposed divestment of 72 Loyang Way for a sale consideration of $34.08 million, which was announced last month, is still subject to JTC’s approval.
“We have also demonstrated proactive capital management by refinancing two loans ahead of maturity in 1Q19 and now have no refinancing requirement until FY21,” says Roy Teo, CEO of the manager.
“Our focus in FY19 will be to enhance our operational performance and prudently evaluate further growth opportunities in Australia to achieve sustainable returns for our unitholders,” he adds.
Units in Soilbuild REIT closed 0.8% higher at 63.5 cents on Wednesday.
