Soilbuild Reit

Soilbuild Reit - from TA point of view, the current price of 68.5 cents is hovering above all the SMA lines such as 20 days MA, 50,100 & 200 . Looks bullish.

MACD is also showing a positive divergence. Looks positive.

Short term wise, we may likely see the price heading higher towards 70 then 72 cents.

Not a call to buy or sell.
Please do you own due diligence.

I have roughly glanced through their financial nos for the past 4 years and below is my observation:

Total revenue has seen generally increasing from 68.14m in 2014 to 81.84m in 2017.

Net Income had suffered a fall from 42.43m in 2014 to a negative (loss) of (28.29m).
I think investor might want to take note of this and check further into their latest financial report.

Gearing seems quite high above 40% , at 43.3% - Total Assets divided by Total Liabilities ( 512.965/1181.603). Usually, for Reit counter, we would prefer below 40% ideally would be good to have it in the range of 30-36%..

DPU has been generally declining from 6.2 cents in 2014 to 5.7 cents in 2017. A decrease of 8% of which is not so rosy for a Reit counter which ideally would prefer it to maintain or increasing.

Soilbuild REIT announces distributable income of S$14.6 million and S$59.9 million for 4Q and full year FY2017 respectively Highlights

• 4Q & FY2017 DPU was 1.383 cents and 5.712 cents respectively

• Proposed divestment of 61 and 71 Tuas Bay Drive for S$55.0 million

• More than 920,000 sq ft of renewals, forward renewals and new leases signed in FY2017

• Portfolio occupancy stands at 92.7%

NAV of 63.4 cents.
P/B 1.03

The current price of 68.5 cents is trading above its NAV of 63.4 cents. It is trading at a premium level  of which you may want to take note .

DPU of 5.7 cents which translate to a yield of 8.7% looks rather attractive .

I think the fair value is around 69 - 70 cents.

Trade/invest base on your own decision.



Prudent and Pro-active Capital Management :
On 19 October 2017, Soilbuild REIT entered into a S$200 million, 4.5-year secured facility agreement with OCBC and RHB for the refinancing of a S$185 million secured loan with a balance of S$15 million available for draw down up to October 2018 (“Refinancing”). Post Refinancing, Solaris remains the single encumbered property in Soilbuild REIT’s portfolio.

The Refinancing ahead of the original debt expiry enabled Soilbuild REIT to extend its weighted average debt maturity and enjoy some interest expense savings. In November 2017, Soilbuild REIT emerged as a highly commended winner at the Adam Smiths Awards Asia 2017 (best funding solution category) for the second year running.

In 4Q FY2017 and FY2017, Soilbuild REIT’s weighted average borrowing cost was 3.20% p.a. and 3.31% p.a. respectively.

As at 31 December 2017, its weighted average debt expiry stood at 2.7 years and interest rate exposure was 70.1% fixed for the next 1.4 years. Soilbuild REIT’s unencumbered investment properties were in excess of S$803 million, representing

http://infopub.sgx.com/FileOpen/SB%20REIT%20media%20release.ashx?App=Announcement&FileID=485550

Rentals of all industrial properties fell by 3.0% and 1.1% in 3Q 2017 y-o-y and quarter-onquarter respectively.

The multi-user factories, single-user factories and warehouse rental indices have receded 3.0%, 2.7% and 4.5% y-o-y respectively, whilst business park rentals expanded 2.6% y-o-y.

Mr Roy Teo, CEO of the Manager, said: “We are pleased to report that amid the subdued industrial market, Soilbuild REIT has maintained its DPU q-o-q. The portfolio continues to face headwinds from the oversupply of industrial space in Singapore.

In the short term, our focus is to maintain the portfolio occupancy level which may require us to compromise on rental rates. In line with our proactive portfolio management strategy, we are also pleased to propose the divestment of KTL.

The divestment will free up capital and provides greater financial flexibility for our pursuit of other growth drivers when opportunities arise in 2018.”

Soilbuild REIT is a Singapore-focused real estate investment trust (“REIT”) with a portfolio of business parks and industrial properties used by industries engaging in manufacturing, engineering, logistic, warehousing, electronics, marine, oil & gas, research and development and value-added knowledge-based activities. Its portfolio of properties includes Solaris, a landmark development in one-north, Eightrium @ Changi Business Park, Tuas Connection, West Park BizCentral and Bukit Batok Connection. Soilbuild REIT’s portfolio has a net lettable area of 3.90 million square feet and an occupancy rate of 92.7% as at 31 December 2017.