Soilbuild Business Space REIT (Soilbuild REIT) reported its 1Q15 results which met our expectations. Gross revenue jumped 10.5% YoY to S$18.6m, underpinned by additional rental revenue from three new properties acquired in 2Q14 and 4Q14. This formed 24.8% of our FY15 forecast. DPU was up 4.5% YoY to 1.633 S cents and constituted 25.3% of our full-year estimate.

Operationally, Soilbuild REIT maintained its portfolio occupancy rate of 100% (as at 31 Mar 2015), while positive rental reversions of 9.3% for lease renewals were achieved in 1Q15. Although 18.4% of Soilbuild REIT’s NLA is expiring in FY15, this is an improvement from the 29.7% figure at the start of the year, which reflects management’s proactive renegotiation efforts.

We will provide more details after the analyst conference call. We maintain our BUY rating, but will review our S$0.93 fair value estimate post briefing.

Source: OCBC Research - 14 Apr 2015