Contributions from recent acquisitions boosted returns at Soilbuild Business Space Reit (Soilbuild Reit) in the second quarter.

Distribution per unit (DPU) rose 7.7 per cent to 1.615 cents in the three months to June 30, while gross revenue was up by 17.2 per cent to $19.6 million.

The higher gross revenue was mainly due to additional rental revenue from customers such as KTL Offshore, Speedy-Tech, Technics Offshore, Tellus Marine and Tuas Connection.

Net property income rose by 19 per cent to $16.7 million, while property operating expenses increased by 8 per cent over the same period last year.

SB Reit Management, the Reit's manager, said yesterday higher finance costs were due to additional borrowings to fund new acquisitions and higher interest rates.

DPU for the six months was up by 6.1 per cent to 3.248 cents, on the back of a 15.1 per cent rise in net property income to $32.5 million. As a result, distributable income was $2.2 million higher than last year's.

Renewals and new leases were signed for about 210,000 sq ft in the quarter, bringing the total for the first half to around 500,000 sq ft. Occupancy remained at 99.8 per cent at the firm.

SB Reit Management's chief executive Shane Hagan said in a statement that the second quarter has been rewarding for Soilbuild Reit, "with occupancy remaining high in the midst of a challenging operating environment".

The quarter also saw a private placement that raised $90 million to substantially fund the Technics acquisition and $100 million of three-year, medium term notes was issued to refinance existing debt. Mr Hagan said: "These were part of the capital management strategy to primarily reduce Soilbuild Reit's gearing and to provide additional funding flexibility.

"Both issues drew very good demand from institutional investors and helped raise Soilbuild Reit's profile in the capital markets," he added.

Joyce Lim