3Q FY2013 Distribution Distribution Timetable 3Q FY2013

Distribution Details

Initiate coverage with BUY

We are initiating coverage on Soilbuild

Business Space REIT (Soilbuild REIT) with a

BUY rating. Our fair value of S$0.82 is based

on the dividend discount model, and implies

an attractive total expected return of 20.1%.

At current price, Soilbuild REIT is trading at

the steepest discount of 8.8% to its book

value, compared to an average P/B of 1.10x

seen across its subsector peers. This is

unjustified in our view given Soilbuild REIT?s

quality portfolio assets, growth potential and

respectable FY14F yield of 7.8%.

Singapore-based industrial landlord with

quality assets

Soilbuild REIT currently owns a young

portfolio of seven modern business space

properties in Singapore which enjoy excellent

connectivity. In addition, Soilbuild REIT has

the largest exposure to the business park

segment relative to the other industrial SREITs.

We like Soilbuild REIT?s exposure in

this space because demand in the local scene

has been growing steadily throughout the

years due to its high quality and lower rents

relative to traditional office spaces.

Strong sponsorship from Soilbuild Group

The Sponsor for Soilbuild REIT is Soilbuild

Group Holdings, a leading integrated

property group based in Singapore. It is one

of the few Singapore construction companies

that are allowed to tender for public sector

projects without any value limitations. Given

Soilbuild Group?s track record and expertise,

we believe Soilbuild REIT is able to leverage

on the capabilities of its Sponsor to grow its

income.

Clear growth opportunities

Soilbuild REIT is granted Right of First

Refusal (ROFR) by its Sponsor over all its

income-producing business space assets in

Singapore. The ROFR currently covers four

industrial properties, providing Soilbuild REIT

with a clear acquisition pipeline. In addition,

several of its properties have under-utilized

plot ratios, and present opportunities for

growth. As of the listing date, Soilbuild REIT

is sitting at healthy gearing ratio of 29.9%,

while 75.0% of its interest rates are fixed.

This not only gives Soilbuild REIT ample debt

headroom to pursue its growth plans but also

limits its exposure to rising interest costs.