Viva Industrial Trust (VIT) posted strong 3Q16 results. Gross revenue increased 31.9% YoY to S$24.3m mainly due to the additional rental contribution from three newly acquired assets (HFB, 11 Ubi Road, 30 Pioneer Road) as well as higher rental from Viva Business Park (VBP). As a result, distributable income grew 35.2% YoY to S$15.7m and DPU grew by a smaller 9.9% YoY to 1.810 S cents due to an enlarged unit base.

9M16 gross revenue came up to S$69.6m or 76% of our FY16 forecast; 9M16 DPU came up to 5.198 S cents, also making up 76% of our FY16 forecast. With respect to asset enhancement initiative (AEI) works for VBP, blocks 750A and 750 have received TOP, while AEI works for block 750B are expected to be completed by 4Q16.

We keep our HOLD rating and fair value of S$0.76 under review pending further details from the briefing later.

Source: OCBC Research - 21 Oct 2016