Soilbuild REIT’s 1Q18 results were within expectations. Gross revenue dropped 11.5% YoY to S$19.4m, or 24.4% of our full-year forecast, mainly due to lower contributions from 72 Loyang Way, West Park BizCentral, Eightrium, as well as KTL Offshore which was divested in Feb 2018.

1Q18 DPU dropped 11.1% YoY to 1.324 S cents or 25.9% of our full-year forecast.

Portfolio occupancy fell from 92.7% in 4Q17 to 87.5% in 1Q18, due to some non-renewals of expiring leases at Westpark BizCentral and Eightrium.

Going forward, we expect the industrial space to remain challenging but see upside against yesterday’s closing price.

Pending further details from the conference call later today, we maintain BUY on Soilbuild REIT with a fair value of S$0.70.

Source: OCBC Research - 17 Apr 2018