Soilbuild Business Space(Dividend yield 7.9%) announced their third quarter results.
The Distributable Income dropped by 3.9% and overall DPU dropped by 13.9%. We have to be aware that there was a preferential offering, which is dilutive to existing shareholders and enlarged the share base.
This preferential offering was to fund the purchase of a short land lease Bukit Batok connection.
The Gross Revenue was down by 4.7% versus last year same time. However, we expected the impact to be greater.
Recall that Technics Oil and Gas defaulted on their rent, and Technics Oil and Gas contribute 8% to revenue. It is likely that the company is drawing down the rental deposit.
There are only 3% more properties in 2016 that is up for renewal. We are already seeing Soilbuild renewing 2.3% of the properties expiring in 2017.
From the above slide, those forward renewal in 2017 have a negative 6.6% rental revision. The new leases look low as well.
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