Delisting of Soilbuild REIT

Delisting of Soilbuild REIT

The privatisation offer of Soilbuild Business Space REIT has been in the talks for some time. Investors should know this is coming or has already came. At this point of writing, Soilbuild Business Space REIT has already been delisted.

Soilbuild Business Space REIT published the announcement on 12th April and delisting happened quickly at 9am on 14th April 2021.

I used to own Soilbuild Business Space REIT in my stock portfolio. However, I divested it in November 2017 at a loss of 11%. Including dividends, I have made a gain of 9%.

If you had held Soilbuild Business Space REIT until its delisting, you would have received S$0.53806 per unit in cash.

The default of rental by 2 tenants (72 Loyang Way and NK Ingredients Pte Ltd) has kept me awake at night. I am glad that I have sold it back then. As you can see, the share price has not appreciate over the years.

Soilbuild Business Space REIT Share Price

Soilbuild Group’s Lim Family and Blackstone

Soilbuild Group’s Lim Family and Blackstone completed the acquisition of Soilbuild Business Space REIT.

With the completion of the Trust Scheme, all Soilbuild Business Space units are now owned by the Offeror, a newly incorporated entity formed for the purpose of the Trust Scheme, which is in turn owned by Clay Holdings II Limited (“Offeror HoldCo”).

Offeror HoldCo is owned by Mr. Lim Chap Huat, Executive Chairman and Co-founder of Soilbuild Group Holdings Ltd., and Clay Holdings I Limited, an entity established by funds managed by affiliates of Blackstone Real Estate.

Lesson Learnt

A good quality REIT should see its share price increase and able to increase its Distribution Per Unit year on year.

If we realised that the fundamentals have deteriorated, we should not hesitate to bite the bullet and sell it off to preserve as much capital as possible. We can then reinvest our capital elsewhere and we should make back our money over time.

57 Years Old and Currently Still in The Rat Race

57 Years Old and Currently Still in The Rat Race

One of my readers asked me for advice on the below scenario that he is facing.

Chance upon your blog since you had one of the REITs that long disposed of but yet I’m still keeping till date (i.e. SoilBuild Business Space REITs). Really enjoy reading your blog and analysis.

I’m 57 years old and currently still in the rat race, having a job that isn’t passionate about and feeling the anxiety and pressure despite already pass the benchmark 55th. I’m not good in investing but saving prudently and working hard, having a bit of equities in CASH, CPF, SRS. Yet the worst performance are those parked in SRS, guess it’s more than 50% lost. The psychologically not willing to let go, couple with the emotional fear of further losing, had since been holding me back from reshuffle the portfolio.

Appreciate any advice you can share.

The first problem that he is encountering is that the REIT that he is holding on is actually on a downtrend which is Soilbuild Business REIT which I have sold long ago. Believe me, it was a hard decision to make when I sold off Soilbuild Business REIT at a loss of 11% and I can understand the feeling of holding a REIT whereby you do not know how much further the value will drop. Like I have mentioned in my previous post, Soilbuild Business REIT is in a risky business whereby 11% of its tenants are in the Marine Oil and Gas Business. This puts SoilBuild Business Space REIT in a high risky position should more tenants default their rent.

57 Years Old and Currently Still in The Rat Race

My advice is to sell off Soilbuild Business REIT and reinvest the monies into something more stable such as healthcare REITs or retail REITs. Avoid industrial and office REITs as these industries tend to be cyclical. There are plenty other REITs out there such as SPH REIT, CapitaMall Trust and Mapletree Commercial Trust whereby there is still further room for growth.

The second problem is what to do with extra Cash, CPF and SRS? Given his age of 57, I would not put my cash into fixed deposits as this will lock down the monies. I will place the extra cash and SRS into Singapore Savings Bond as there is no lock down period which means you can redeem Singapore Savings Bond any time you want without any penalty. I know the interest rate for SRS is petite and if you didn’t know yet, you can invest in Singapore Savings Bond using SRS which should give you an interest rate of 1.62% for a period of 1 year.

Singapore Savings Bond is an extremely safe investment and I hope the above advice helps!