Soilbuild Business Space REIT property in Changi Business Park, EightriumSoilbuild Business Space REIT property in Changi Business Park, Eightrium

Singapore-listed industrial REIT, Soilbuild Business Space REIT, announced on 22 March that it has been assigned a Baa3 issuer rating with stable outlook by Moody’s Investors Service.

"Soilbuild REIT's Baa3 issuer rating is underpinned by its portfolio of 11 good quality and well-situated industrial assets in Singapore, income diversification from its exposure to business parks, and stable and recurring rental income supported by a good balance of long-term master leases and multi-tenanted assets," said Rachel Chua, an analyst with Moody’s, in a statement issued by the ratings agency.

"At the same time, the Baa3 rating is constrained by Soilbuild REIT's small operating scale, moderate exposure to its sponsor as well as geographical concentration of assets in Singapore”, she added.

Moody’s also highlighted the REIT’s limited financial flexibility due to its asset encumbrance levels. At 31 December 2015, Soilbuild Business Space REIT had two properties secured under its SGD100 million and SGD185 million term loan facilities, resulting in a secured debt-to-deposited assets ratio of 23.0%.

“Moody's expects the trust's secured leverage ratio will improve over the next two years as management is committed to fund future acquisitions and refinance debt on an unsecured basis”, said the agency.

Besides the rating assigned by Moody’s. Soilbuild REIT is concurrently rated BBB- with stable outlook by Standard & Poor’s Rating Services.

Units of Soilbuild Business Space REIT ended the trading day about 0.7% lower from its previous close on the Singapore Exchange to finish at SGD0.72.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.