Soilbuild REIT: Watching judicial management application for NK Ingredients

Singapore two-dollar bills

Soilbuild Business Space REIT said Friday it was continuing to monitor the application by another creditor of NK Ingredients for the appointment of a judicial manager over the lanolin processing company.

That was as the amount tenant NK Ingredients owed the REIT for July’s rental charges, property tax and land rent rose to S$2.84 million, exceeding its security deposit by S$283,209, the REIT said in a filing to SGX.

The application for a judicial manager was due to be heard in August, Soilbuild REIT said, adding it was watching the status as a way to achieve the best recovery of the rental arrears.

“The manager is concurrently exploring future options which potentially include the outright leasing of the current premises to third parties,
as well as potential asset enhancement opportunities to maximise its gross floor area, amongst other possibilities,” the REIT said.

NK Ingredients did not immediately respond to an emailed request for comment from Shenton Wire; the company did not respond to a previous request for comment.

NK Ingredients is one of the REIT’s top-10 tenants, accounting for around 6.3 percent of revenue in the second quarter, the filing said.

If NK Ingredients is unable to fulfill its lease obligations and the manager is unable to lease out the space, second quarter distributable income and the distribution per unit were likely to fall 11.6 percent on a pro formal basis, Soilbuild REIT said.

In May, the Singapore court had extended the lanolin processor’s moratorium on actions by creditors through 22 July, subject to conditions which included NK Ingredients paying the rental charges, property tax and land rent for June and July on the first day of those months, Soilbuild REIT has said previously.

Earlier this month, the REIT said NK Ingredients was in arrears on the July period.

The NK Ingredients property, located at 2 Pioneer Sector 1 in Singapore, made up 6 percent of fourth-quarter gross revenue and takes up 4 percent of the portfolio by asset value, according to the REIT’s fourth-quarter earnings presentation. It contributed 6.2 percent of monthly gross rental income, the presentation showed.

 

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