Soilbuild Business Space REIT's Eightrium @ Changi Business Park (Photo: REITsWeek)Soilbuild Business Space REIT's Eightrium @ Changi Business Park (Photo: REITsWeek)

Singapore-listed industrial REIT, Soilbuild Business Space REIT, has requested S&P Global Ratings to withdraw a credit rating.

S&P Global Ratings had earlier reaffirmed Soilbuild Business Space REIT’s “BBB-” long-term corporate credit rating with a stable outlook and “axA-” long-term ASEAN regional scale rating.

In a statement issued after the withdrawal request S&P said that the ratings reflected the REIT’s stable cash flows despite the recent rental default involving Technics Offshore Engineering.

“Soilbuild Business Space REIT has invoked its bank guarantee, which is equivalent to 18 months' rent, thus minimising income disruption”, said S&P.

“Notwithstanding this, we expect revenue growth to slow to around 2% in 2016”, the agency added. “We anticipate that the supply of industrial space will increase in 2016 and 2017, and previously high rentals of some of Soilbuild Business Space REIT’s multi-tenanted leases will put pressure on rental renewals”.

In its statement on the withdrawal, Soilbuild Business Space REIT did not given a reason as to why it has requested for it, adding only that it continues to be rated by Moody’s Investors Service where it is rated “Baa3” with a stable outlook.

Units of Soilbuild Business Space REIT finished about 1.5% higher from its previous close on the Singapore Exchange to end at SGD0.695.

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.