Soilbuild sees challenge amid slowdown in manufacturing sector

SINGAPORE - Soilbuild Reit on Wednesday posted a 3.1 per cent fall in distribution per unit (DPU) for the second quarter from the same period a year ago, against a bigger unitholder base.

DPU for the three months ended June 30, 2016, stood at 1.565 Singapore cents, compared to 1.615 Singapore cents a year ago.

This was based on 941 million units for the second quarter, compared to 930 million units a year ago.

Income available for distribution was up 3 per cent to S$14.7 million, mainly due to reduction of property tax expense for one of its 11 properties, West Park BizCentral.

On a half-year basis, DPU was also down to 3.122 Singapore cents, falling 3.9 per cent from a year ago.

Occupancy rate was 92 per cent as at the end of June, with the weighted average lease expiry by gross rental income at 4.6 years.

Soilbuild said: "86 per cent of the fiscal 2016 lease expiries were due for renewal in the first half of the year." With the slowdown in the manufacturing sector, rentals of all industrial properties has also softened by 2.7 per cent in the first quarter of the year, over the preceding quarter, the Reit manager said.

"The challenge remains to re-let the vacant space and to renew the multi-tenanted leases that are expiring for the rest of the year which makes up 2 per cent of the portfolio's net lettable area.

"We will continue to focus on active asset management while maintaining our prudent approach in capital management," Soildbuild said.

Units of Soilbuild Reit closed at S$0.70, up half a Singapore cent, on Wednesday.

This article was first published on July 14, 2016.
Get The Business Times for more stories.