Viva Industrial Trust’s (VIT) solid set of 2Q17 results were within expectations. 2Q17 revenue jumped 18.0% YoY to S$27.6m, boosted by a S$2.3m increase in contributions from VBP as well as a S$1.9m contribution from the Chin Bee acquisition.

Similarly, 2Q17 NPI increased 17.5% YoY to S$20.2m. 2Q17 DPU increased 6.3% YoY to 1.861 S cents, or 24% of our full-year forecast.

In particular, we note that total occupancy at Jackson Square stood at 89% as at end-Jun, with over 70K sq ft of new leases signed during the quarter including that with new tenant, PSBA.

We also note that with the final phase of AEI complete at VBP, new tenants, Harvey Norman, Gorilla Climbing Gym, and True Fitness have taken up space.

Given the recent run-up in VIT’s unit price, we place our Buy rating and fair value of S$0.83 under review pending further details.

Source: OCBC Research - 26 Jul 2017