Soilbuild REIT DPU Increases for 4QFY15

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Soilbuild REIT announces its results for 4Q2015 on 21st January 2016. Distribution Per Unit (DPU) increase 1.8% to 1.614 cents as compared to 1.585 cents a year ago. This brought the total DPU for 2015 to 6.487 cents as compared to 6.193 cents in 2014.

Based on the market closing price of S$0.77 on 31st December 2015, the yield for Soilbuild REIT is 8.42% for year 2015.

4Q2015
(S$’000)
4Q2014
(S$ ‘000)
YoY(%)
Gross Revenue 20,434 17,682 15.6
Net Property Income 17,490 14,932 17.1
Distributable Amount 15,091 12,892 17.1
Distribution Per Unit (“DPU”) (cents) 1.614 1.585 1.8
Annualised DPU (cents) 6.487 6.193 4.7

Soilbuild REIT DPU

Lease Expiry

From the below table, we can see that all of the properties in its portfolio have long land lease expiry.

Property Land Tenure Expiry
Solaris 31 May 2068
West Park BizCentral 31 July 2068
Eightrium @ CBP 15 Feb 2066
Tuas Connection 30 Sep 2050
NK Ingredients 30 Sep 2046
COS Printers 31 Jul 2042
Beng Kuang Marine 29 Oct 2056
Tellus Marine 15 Feb 2054
KTL Offshore 18 Jul 2066
Speedy-Tech 30 Apr 2050
Technics Offshore 20 Mar 2038

Things to Note

Weakness in Manufacturing Sector

Manufacturing sector is slowing down which affects the industrial property market. This has a downward pressure on industrial rents and occupancy.

Long Term Leases

Long term leases of 5 to 15 years provide stability.

Fixed Annual Rental Escalation of Master Leases

Fixed annual rental escalation of master leases applies to its tenants (Solaris, NK Ingredients, COS Printers, BK Marine, Tellus Marine, KTL Offshore, Speedy-Tech, Technics).

One thought to “Soilbuild REIT DPU Increases for 4QFY15”

  1. Look carefully at the financial statements. Soilbuild Reit is paying distribution out of increase in fair value of property using their cash reserves for 2014 and 2015. This artificially boost their dpu and gives a misleading picture of the dpu that’s sustainable. Dumped all my soilbuild shares when I realized it today.

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