I look a small position in SoilBuild Business Space REIT (S3VU) before the 3rd quarter results and it turned out to be pretty well for the quarter. So the 3rd quarter outperformance against the forecast mainly due to combination of higher revenue, partial income from the recently acquired Tellus Marine and lower property expenses due to lower maintenance costs for multi-tenanted properties.
DPU - 1.546 cents
Yield - 7.8%
NAV - $0.80
Gearing - 32%
Current Price - $0.79
For this quarter Soilbuild Reit enjoyed a portfolio occupancy rate of 99.9% with only 8.4% of the fiscal 2014 lease expiries outstanding.
Its current portfolio comprise eight properties located in key technology, media and back office hubs and logistics clusters in Singapore with total net leasable area of 3.05 million sq ft and a weighted average lease expiry of 3.8 years. The REIT has an average leverage of 30.3% and a weighted average debt maturity of two years as at Sept 30.
In a separate announcement on Tuesday, Soilbuild Reit said that it is buying 2 adjacent detached purpose-built factories located along Tuas Bay Drive for S$55 million.
Properties
Business Parks
- Eightrium @ Changi Business Park
- Solaris
Industrial Properties
- Beng Kuang Marine
- COS Printers
- NK Ingredients
- Tellus Marine
- Tuas Connection
- West Park BizCentral
Summary
The stock price below NAV and 7% yield are the main factors that I choose to long this REIT. Other concerning factor was occupancy rate but it was mostly renewed this quarter. More importantly we will see increase in DPU next quarter from the full income of Tellus Marine and if the acquisition for the 2 factories in Tuas Bay Drive happen their partial income will help as well.
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