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Sunday, 26 March 2017

Viva Industrial Trust

27/3/2017
Accumulate:
  1. Strong fundamentals - NPI CAGR, Steady dividend growth, strong occupancy
  2. Attractive dividend yield 8.9%
  3. Limited supply of new business parks - Positive rental reversions expectations
  4. Strong diversified tenants
Metrics
Last Done (as of 27/3/2017): S$0.785
AUM: S$1.25 billion - smaller so cost of debt higher
Debt: Gearing 39.4% (a bit high), WADM 3.2 years (ok), 89.9% fixed, Cost of debt 4% (high), SGD
Occupancy: 89.8% (not bad), WALE 3.1 years (average)
NAV: S$0.791, PNAV 0.99 (a bit high)
Dividend: 2016 DPU S$0.07002, Dividend yield 8.9% (high), CAGR ~1.7%
NPI: CAGR ~44%

Operations
Industrial REIT - 9 properties in Singapore
2 Integrated Business Parks, 3 Warehouses and 4 Light Industrial Factories
Diversified trade sectors
Total of 143 tenants, of which 42.5% of tenants are in information technology, e-business
or data centre operations
65.9% of tenants are multinational corporations or government-linked corporations

Growth story
Limited Supply of New Business Parks
Completion of yield accretive acquisition of 6 Chin Bee Avenue taps on the strong potential of Singapore’s growing and recession-resilient food services sector
Build pipeline of yield accretive acquisitions in Singapore and overseas
Asset enhancements

Risks
Limited debt headroom - Gearing 39.4%
Expiry of rental support at UE Bizhub East - Dividend yield may only be 8.4%
Non-renewal of tenants
at
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