From Company's Prospectus
1. Business Description
Industrial Reit, with
a focus in business space properties. Soilbuild Reit is a Singapore
real estate investment trust with an initial portfolio of quality business
space properties located in Singapore
(i) all properties zoned as business park (which includes
business space used primarily for office, including any ancillary usage, so
long as such usage is permitted under the relevant regulation) and
(ii) industrial properties (including, but not limited to,
ramp-up facilities, flatted factories and light industrial properties) which
are used primarily for, among others, manufacturing, engineering, logistics,
warehousing, electronics, marine, oil & gas, research and development and
value-added knowledge based
activities.
Initial Portfolio includes
2 business parks properties & 5 industrial properties. Soilbuild REIT’s initial portfolio
of properties comprises seven business space properties – two business park
properties and five industrial properties. They include Solaris, an iconic
business park development in one-north, Eightrium @ Changi Business Park, Tuas Connection,
and West Park BizCentral.
From Company's Prospectus
Soilbuild Group is
the Sponsor for the Reit. Soilbuild Group Holdings Ltd. is the Sponsor of Soilbuild REIT and
will be the largest Unitholder holding a stake of 27.0% (assuming the
Over-Allotment Option is not exercised). The Sponsor is a
Singapore-based integrated property group with a long track record of
experience in the construction and development of business park, industrial and
residential real estate in Singapore
From Company's Prospectus
High
occupancy rate, with Master Lease Structure to guarantee rental stability. Soilbuild Reit has
a high level of occupancy rate at 99.7%. In addition, 4 of its 7 properties are
under Master Lease which provides rental stability. Below are the details of
which property’s Master Lease Structure:
From Company's Prospectus
Right
of First Refusal (ROFR) to 4 properties. Below are the 4 properties in which
Soilbuild Reit has the ROFR.
From Company's Prospectus
From Company's Prospectus
3. Financial Highlights
Offering price of
S$0.78, represents 2.5% discount to NAV of S$0.80. At offering price
of S$0.78, it represents a 2.5% discount to its NAV of S$0.80.
Projected 7.5% &
7.7% distribution yield for FY13 & FY14 respectively. Based on the
prospectus projection, FY13 & FY14 distribution yield is 7.5% & 7.7%
respectively.
From Company's Prospectus
Valuation
looks slightly cheap. By pricing it at a slight discount to the
NAV, Soilbuild Reit looks slightly cheap. Comparing against its peers,
Soilbuild Reit also provides a higher dividend yield.
As
usual, below is the financial statements of the Reit:
From Company's Prospectus - Balance Sheet
From Company's Prospectus - Income Statement
From Company's Prospectus - Cash Flow
4. Investment Highlights
Young
and modern properties with longest weighted average leasehold term for
underlying land of 50.4 years compared to other industrial S-REITs. Soilbuild Reit has a
young and modern properties with weighted average age of 3.4 years (by GFA). In
addition, its portfolio has one of the longest average leasehold term for
underlying land of 50.4 years compared to other industrial S-REITs.
From Company's Prospectus
Slightly cheap valuation. As mentioned above, valuation for
Soilbuild Reit looks slightly cheap and there is some juice left in this IPO.
5. Investment Risk
Again, the dividend play is over. As mentioned in the previous Reit IPOs, the dividend play for S-REITs seems over.
Lack of upside catalyst. Investing in Reit nowadays has
become more alpha selection rather than beta allocation. Although, Soilbuild
Reit has a ROFR for another 4 properties, I struggle to see big upside
potential as the Sponsor is not yet established enough.
6. Technical Analysis
In term of momentum, the IPO technical looks
very strong. In addition, with the stellar first day performance of its
Sponsor, Soilbuild Reits, I guess the demand might be good.
However, there seems to be a lot of existing
Industrials Reits out in the secondary and I think fear a situation of
oversupply.
Thus I’m giving this IPO a fair rating for its technical.
7. Conclusion
In a scale of 1 to 5, I will rate it at a 3.5 rating.
I
like the valuation as there is still some juice left in this pricing but I’m
not overly excited like Money Max, which I rate it at an “all-in” 5 rating.
Thus I guess players can put some money to work and do a pump-&-dump if it opens higher. But I doubt that it will be a flyer performance.
8. Timetable
From Company's Prospectus
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