Soildbuild REIT looks to higher rental rates for growth

As portfolio occupancy approaches maximum level.

"With portfolio occupancy rates already near full (c.99.8% as of Sept’13) and expected to remain resilient, growth is likely to be driven by higher rental rates," reckoned DBS in a research report following the release of Soilbuild REIT's maiden results.

DBS further expects reversions to remain positive as SBREIT will be renewing close to 16% of portfolio NLA (majority coming from Eightrium and Tuas Connection).

"This is because of low passing rent levels that are up to c.10% below current market rent levels," said DBS.

The research firm also foresees selective acquisitions, particularly of industrial properties.

"With gearing below management’s long term target of c35%, we believe that acquisitions are likely to feature,
albeit at a more selective stance. On that front, assuming a target gearing level of c35%, SBREIT could potentially acquire up to cS$75m worth of industrial properties," said DBS.