SoilBuild Business Space REIT

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Soilbuild Business Space Reit Unaudited Financial Statements And Distribution Announcement For The Fourth Quarter ("4Q FY2016") And Financial Year From 1 January 2016 To 31 December 2016 ("Ytd Fy2016")

Financials Archive

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Statement of Total Return and Distribution Statement

Balance Sheet

Footnotes:

  1. Non-tax deductible items comprise the Manager's management fees, property management fees and lease management fees paid or payable in Units, rent free amortisation, the Trustee's fees, amortisation of debt arrangement and prepayment fees, security trustee and agency fee, bank commitment fees and net change in fair value of investment properties.

  2. nm denotes not meaningful.

Balance Sheet

Balance Sheet

Review of the Performance on YTD FY2016 compared to YTD FY2015

Gross revenue was S$81.1 million in YTD FY2016, S$1.8 million or 2.3% higher than the gross revenue in YTD FY2015. This was mainly due to higher revenue contributed by Loyang Way, Bukit Batok Connection, Solaris and Eightrium amounting to S$3.2 million, S$2.1 million, S$0.5 million and S$0.1 million respectively and was partially offset by reduction in revenue from West Park and Tuas Connection amounting to S$3.1 million and S$1.2 million respectively.

Property operating expenses were S$10.5 million in YTD FY2016, S$1.1 million lower than YTD FY2015 largely due to the reduction in property tax expense amounting to S$0.8 million arising from the revision of FY2015 and FY2016 annual values by the tax authority and reduction of land rent amounting to S$0.2 million.

Net property income was 4.3% higher at S$70.7 million in YTD FY2016 from S$67.8 million in YTD FY2015 mainly due to the above reasons.

The increase in finance expenses amounting to S$1.1 million was mainly due to higher notional interest expense on the S$55 million interest-free loan and S$40 million unsecured loan drawn down in 2H FY2016.

The decrease in Manager's management fees of S$0.4 million was largely due to the absence of performance fee amounting to S$0.7 million in YTD FY2015 and partially offset by higher base fee arising from the increase in distributable income. Other trust expenses were lower in YTD FY2016 as other trust expenses in YTD FY2015 included Multicurrency Debt Issuance Programme establishment cost amounting to S$0.2 million.

Net change in fair value of investment properties was S$55.4 million lower due to S$50.9 million revaluation loss in YTD FY2016 as compared to S$4.5 million revaluation gain in YTD FY2015. Revaluation loss in FY2016 mainly relates to Loyang Way, West Park, Tuas Connection and Eightrium amounting to S$32.0 million, S$13.0 million, S$4.0 million and S$1.8 million respectively. The decline in the valuation of Loyang Way was largely due to the termination of lease with Technics Offshore Engineering Pte Ltd ("TOE") in December 2016 whereas the decline in the valuation of West Park and Tuas Connection was mainly attributed to higher vacancies and negative rental reversions.

Total return before distribution amounting to a deficit of S$0.6 million was S$52.2 million lower than YTD FY2015 mainly due to the reduction in net change in fair value of investment properties and partially offset by increase in net property income amounting to S$2.9 million.

Net effect of non-tax deductible items comprised mainly net change in fair value of investment properties, manager's management fee, property and lease management fees paid/payable in units and amortisation of debt arrangement and prepayment fees.

Income available for distribution was S$60.3 million in YTD FY2016, 4.1% higher than YTD FY2015 mainly due to higher net property income and interest income and was partially offset by higher finance expenses.

Review of the Performance on 4Q FY2016 compared to 4Q FY2015

Gross revenue was S$21.7 million in 4Q FY2016, S$1.3 million or 6.1% higher than the gross revenue in 4Q FY2015 mainly due to the increase in revenue from Bukit Batok Connection amounting to S$2.0 million and was partially offset by reduction in revenue from West Park amounting to S$0.8 million.

Property operating expenses were S$2.8 million in 4Q FY2016 which was S$0.1 million lower than 4Q FY2015 mainly due to reduction in land rent expense.

Net property income was 8.0% higher at S$18.9 million in 4Q FY2016 from S$17.5 million in 4Q FY2015 mainly due to the abovementioned reasons.

The increase in finance expenses was mainly due to S$40 million unsecured loan drawn down in 2HFY2016 and notional interest expense on the S$55 million interest-free loan.

The decrease in Manager's management fees of S$0.5 million was due to the absence of performance fee amounting to S$0.7 million in 4Q FY2015 and partially offset by higher distributable income in 4QFY2016 which resulted in higher base fee. Other trust expenses were S$0.1 million higher in 4Q FY2016 largely due to the reversal of over-accrued legal fee in 4Q FY2015.

Net change in fair value of investment properties was S$55.4 million lower due to S$50.9 million revaluation loss in FY2016 as compared to S$4.5 million revaluation gain in FY2015. Revaluation loss in FY2016 mainly relates to Loyang Way, West Park, Tuas Connection and Eightrium amounting to S$32.0 million, S$13.0 million, S$4.0 million and S$1.8 million respectively.

Total return before distribution amounting to a deficit of S$37.5 million was S$54.0 million lower than 4Q FY2015 mainly due to a negative net change in fair value of investment properties amounting to S$55.4 million, and partially offset by higher net property income amounting to S$1.4 million.

Income available for distribution was S$16.4 million in 4Q FY2016, 8.4% higher than 4Q FY2015 largely due to higher net property income and interest income and partially offset by higher finance expenses.