Recently, Moody’s Investors Service has changed the rating outlook for Soilbuild REIT to negative from stable. Soilbuild REIT overall portfolio occupancy also fell to 92%. Below I evaluate the risks versus the positives and whether you should enter into a position with Soilbuild REIT right now.

Near Term Risk

Seeking Replacement Tenant

The SGD11.8 million that Soilbuild REIT receives from the default of Technics Offshore Engineering Pte Ltd will be exhausted in Q3 2017. Soilbuild REIT will have to find a new tenant to replace the missing revenue.

More Debt

Recently, Soilbuild REIT announced the proposed acquisition of Bukit Batok Connection for a total of SGD100.49 million. This will be voted and concluded in the upcoming extraordinary annual general meeting. The acquisition will be funded by balanced mix of unsecured debt and equity. The aggregate leverage of 35.9% allows Soilbuild REIT to have a further debt headroom of ......