Viva Industrial Trust's (VIT) 1Q results were within expectations.

Revenue increased 4.8% YoY to S$28.7m while distributable income dropped 9.2% YoY to S$16.2m, mainly due to the management fees being paid in cash alone as opposed to a combination of cash and stapled securities.

However, distribution declared was 0.8% higher YoY due to a S$1.78m top-up consisting of all previously retained distributable income arising from the Jackson Square Rental Support settlement.

As a result of 1.6% YoY increase in the number of stapled securities for calculation of DPU, DPU dropped 0.9% YoY to 1.838 S cents or 24.4% of our full-year forecast.

In other updates, the period of exclusivity for the discussions on the proposed merger with ESRREIT has been extended to 31 May 2018.

We place our BUY rating and fair value of S$0.93 under review pending further details.

Source: OCBC Research - 16 May 2018