ESR-REIT Coud Suffer From Hyflux Troubles

News about ESR-REIT

The difficulties met by water processing company Hyflux could impact ESR-REIT bottom line:

Hyflux is one of ESR-REIT’s top-10 tenants by rental income and income from the property accounted for 3.5% of rental income in December 2018.

Assuming a worst-case scenario wherein Hyflux is unable to fulfil its rental obligations, the REITs are unable to lease out space in the most recent financial year, and the full amount of the security deposit was drawn down for rental, ESR-REIT would suffer a 5.4% drop in annualised Q4 2018 distribution per unit.

ESR-REIT
Price0.520 SGD
NAV0.457 SGD
Yield (4 quarters)7.73%
Gearing39.0%