Another bad piece of news for Soilbuild Business Space REIT investors out there. NK Ingredients Pte Ltd, the sole tenant for 2 Pioneer Sector 1 has defaulted on its rent. If you do not know, NK Ingredients Pte Ltd is one of the top ten tenants contributing 5.8% of Soilbuild Business Space REIT monthly gross rental income.
Soilbuild REIT has called upon the insurance guarantee today. The balance of the insurance guarantee of S$1,689,556.67 is equivalent to approximately four months of rent.
The stock price reacted to the bad news and plunged from $0.73 to $0.69 before closing at $0.70. It seems that I am a bit late in running now.
I am vested in SoilbuildBizReit.
What is your advice – to divest partially this Reit or wait?
Hi Jeffery, I am vested too. It goes back to your original game plan. Did you invest in Soilbuild REIT for dividends or growth? The good news is it still pays dividends although NK Ingredients has defaulted on its rent. The bad news is most likely if they cannot find a replacement tenant after the guarantee runs out, DPU is going to be impacted.
If you are currently profitable, I suggest to divest and invest in other REITs. Unfortunately for me, I am still waiting for a good price to divest Soilbuild Business REIT as I indicate in my previous posts, this REIT has been getting into too many such disputes.