Soilbuild Business Space REIT NPI fell 11.6% to $16.m in Q1

It blamed lower contributions from 72 Loyang Way, West Park BizCentral, and Eightrium.

Soilbuild Business Space REIT's net property income (NPI) fell 11.6% from $19.21m to $16.99m in the first quarter of 2018. It blamed lower contributions from 72 Loyang Way, West Park BizCentral, Eightrium, and KTL Offshore, which was sold in February 2018.

According to its financial statement, distributable income fell 10.4% from $15.57m to $13.96m and distribution per income (DPU) dropped 11.1% from 1.5 cents to 1.3 cents.

Portfolio occupancy rate fell from 92.7% in Q4 2017 to 87.5% in Q1 2018. "The Manager successfully completed more than 302,000 sq ft of renewals, forward renewals, and new leases in the first quarter despite the soft leasing environment," Soilbuild said.

Rental reversion was negative at 7.2% and 11.9% for renewal and new leases respectively.

Non-renewals of some expiring leases at Westpark BizCentral and Eightrium resulted in property occupancy dipping to 81.5% and 84.9% respectively. "The non-renewals were mainly due to tenants’ business closures and
downsizing and tenants shifting into facilities they have acquired," the company added.

Soilbuild CEO Roy Teo noted the industrial property market remains soft with competing supply negatively impacting their occupancy and rental rates. "We are making headway with the restructuring of Soilbuild REIT’s portfolio and strengthening its tenants mix. With the divestment of KTL Offshore, marine offshore and oil and gas sectors account for only 6% of revenue. We have also received 6 months of cash security deposit from NK Ingredients Pte. Ltd. as they continue operating in our premises,” he added.