Soilbuild REIT’s 4Q18 results were above expectations, with 4Q18 DPU increasing 16.5% QoQ and 4.9% YoY to 1.451 S cents.

4Q18 gross revenue and NPI increased 24.3% and 15.3% YoY respectively, mainly due to

1. liquidation proceeds received from Technics Offshore Engineering,
2. conversion of Solaris into a multi-tenanted property and
3. maiden contribution from two Australian properties.

On a full-year basis, FY18 DPU fell 7.5% YoY to 5.284 S cents or 105% of our full-year forecast.

Rental reversions came in at -12.6% for new and renewal leases in 4Q18 and -8.6% for those in FY18.

We keep our BUY rating on Soilbuild REIT but place our fair value of S$0.665 under review pending further details from this morning’s briefing.

Source: OCBC Research - 22 Jan 2019