Soulbuild REIT's net property income dips 2.9% to $17.3m in Q3

No thanks to weaker rental income from two properties.

The overall softening of industrial property rents have badgered the bottomline of Singapore-listed SoilBuild REIT, which recorded a 2.9% decline in its net property income to $17.3 million.

This is in contrast to the $17.8 million recorded the same quarter last year, which was when the group posted a $20.7 million in revenues, 4.7% higher than this quarter's $19.7 million.

According to OCBC Investment Research, this was largely attributed to weaker rental income from West Park BizCentral and Tuas Connection.

"Operationally, Soilbuild REIT managed to lift its portfolio occupancy from 92.0% to 94.8%. However, negative rental reversions of 6.6% were registered for its forward renewal leases in 3Q16," the brokerage firm stated.

Meanwhile, its distribution per unit (DPU) fell 13.9% to 1.399 Singapore cents from 1.625 cents.

OCBC said the DPU decline is "a result of an enlarged unit base from its 1 for 10 preferential offering exercise, while material contribution from its Bukit Batok Connection (BBC) acquisition has yet to kick in as the purchase completion took place only on Sep. 27."

It noted that DPU would have declined at a smaller rate at 5.7% to 1.533 cents if the effects of the preferential offering are adjusted.