Initiate coverage with BUY We are initiating coverage on Soilbuild Business Space REIT (Soilbuild REIT) with a BUY rating. Our fair value of S$0.82 is based on the dividend discount model, and implies an attractive total expected return of 20.1%. At current price, Soilbuild REIT is trading at the steepest discount of 8.8% to its book value, compared to an average P/B of 1.10x seen across its subsector peers. This is unjustified in our view given Soilbuild REIT’s quality portfolio assets, growth potential and respectable FY14F yield of 7.8%.
DBS (please refer to attached report for details thanks)
Quality portfolio with unique competitive strengths. Soilbuild Business Space REIT (“SB REIT”) offers exposure into a modern portfolio of business park/industrial properties in Singapore with a valuation of S$935m. Compared to existing industrial S-REITs, its portfolio is the youngest, with an average age of 3.1 years (by GFA), backed by long land lease tenure of c.51 years. SB REIT will derive 42-43% of its net property income from master leases, with tenures ranging from 5-15 years, and this will offer strong income visibility to the REIT. High exposure to the business park space. At 43.2% of asset value, SB REIT will have one of the highest exposures in the business park space segment (peers have approximate exposure ranging from 7.9%-20.6% of value), which we believe will remain relevant in the face of Singapore’s growth towards a knowledge-based, value- add manufacturing economy. This augurs well for the performance of the portfolio in the medium term. Reputable Sponsor with visible inorganic growth pipeline. The Sponsor is Soilbuild Group Holdings Ltd. (“Sponsor”), a leading property group with end-to-end integrated real estate capabilities. The Sponsor has given SB REIT a right of first refusal (ROFR), which currently covers four industrial properties. When acquired and developed completely, the ROFR properties possess the potential to increase the REIT’s GFA by 72%. In addition, SB REIT can extract a further 0.8m sq ft (25% of current GFA) through maximising unutilized GFA from its portfolio. Initiate with BUY, TP S$0.87. At a FYP13F-15F yield of 7.8%-8.7%, SB REIT offers one of the highest yields amongst the S-REIT space, which is attractive. Our DCF TP of S$0.87 implies a total return of 24%.
so far 3 brokerage houses have initiated buy coverage on SB reit, think there might be a few more to come
price has seen got up from 72 cents to 74.5 cents, meaning less margin of safety
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
Soilbuild REIT exceeds IPO forecast by 6.1% with DPU of 1.562 cents for quarter ended 31 March 2014
- Portfolio occupancy increased to 100% as at 31 March 2014
- All expiring leases in 1Q FY2014 were either renewed or the space re-let;
- Over 76% of all the lease expiries due in 2014 have been already renewed, re-let or pre-committed; and
- New tenant, DBS Bank Limited welcomed in Eightrium @ Changi Business Park.
Soilbuild Reit on track to meet FY14 DPU forecast
By
Lynette Khoolynkhoo@sph.com.sg@LynetteKhooBT
22 Oct5:50 AM
Singapore
SOILBUILD Business Space Reit says it is well-placed to deliver its forecast distribution per unit (DPU) for the full financial year of 2014, having reported a DPU of 1.546 Singapore cents for the third quarter ended Sept 30 that beat its own forecast by 2 per cent.
Seems that quite a few brokerage houses has been upgrading their BUY rating on this counter. I've been vested in this ever since IPO and I must say that the increasing DPU is very encouraging.
Soilbuild REIT - From strength to strength; maintain BUY, TP S$0.91
Soilbuild REIT (SBREIT) was the first S-REIT to conduct equity fund raising in 2015, raising S$90m at the top end of its indicative range of S$0.795-0.805. Demand appears strong, implied by the fairly tight 2.8% discount to volume weighted average price. Proceeds will be deployed to partly fund the acquisition of 72 Loyang Way (S$98.1m @ initial yield of 8.0%) which is expected to be marginally accretive to unitholders. Post-acquisition gearing is estimated to be c.35%. Following a strong set of 1Q15 results, SBREIT's outlook remains stable. Maintain BUY, TP S$0.91 (Prev S$ 0.92). TP is adjusted down due to higher unit issue than projected. We continue to like its attractive yields of 6.6-7.9%, with more upside coming from acquisitions when executed on in 2H15-2016.
this skank just made new all times lows recently , are you aware of any reason for that or is it one of those sweet bargains to get an almost 9% dividend yield ?
In a world of ultra-low or negative interest rates and where yield is hard to find are we going to find more interest in some of the relatively high yielding listings on SGX?
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