Viva Industrial Trust (SGX Code: T8B) is set to buck the trend of weak industrial property market and distribute higher dividend yield of 9.7% for 2017. This is well above the average 7.3% yield investors are expected to receive from the Singapore Real Estate Investment Trusts (S-REITs) sector. Key developments that will support the stronger payout include:
- Acquisition of a logistics building (30 Pioneer Road) in April 2016
- Completion of asset enhancement of Viva Industrial Park in 4Q16, with major success on its retail lease space
- Proposed acquisition of brand new logistics warehouse (6 Chin Bee Avenue) in October 2016
The trust is trading at 0.93x Price-to-book (P/B), in line with its S-REIT peers, despite its higher expected dividend yield.
Key risks on Viva Industrial Trust are:
- Higher gearing and interest costs
- Existence of income support
- Asset revaluation risks from higher cap rates
For more information on Viva Industrial Trust and its financial performance, please click here.