SINGAPORE (Oct 26): The manager of AIMS AMP Capital Industrial REIT has announced a Distribution Per Unit (DPU) of 2.55 cents for 2Q18 ended Sept, a 7.3% fall from the DPU of 2.75 cents in 2Q17.
Gross revenue in 2Q18 fell by 1.3% to $29.5 million mainly due to lower rental and recoveries from 20 Gul Way as four phases of the property reverted to multi-tenancy leases. This was partially offset by rental contribution from 30 Tuas West Road as it became income producing from Feb 27.
Property operating expenses for 2Q18 of $10.1 million were $0.5 million lower than the property expenses for 2Q17 of $10.6 million mainly due to lower property tax and land rent expenses on certain properties offset by higher costs arising from the reversion of the four phases of 20 Gul Way to multi-tenancy leases and in line with the increase in revenue from 30 Tuas West Road.
Net property income for 2Q18 stood at $19.4 million, or $0.1 million higher compared to 2Q17.
Borrowing costs for 2Q18 of $4.9 million were $0.3 million higher than the borrowing costs for the corresponding quarter in the previous year. Other trust expenses for 2Q18 of $0.5 million were $0.1 million higher.
During the quarter, the manager successfully executed 17 new and renewal leases representing 47,206.6 sqm or 7.4% of net lettable area.
AA REIT achieved overall portfolio occupancy of 88.8% which is currently in line with the Singapore industrial average of 88.7%.
The redevelopment at 8 Tuas Avenue 20 recently achieved TOP in August. A tenant has been secured for the ground floor on 4 September 2017 for a period of 10 years with rent escalations during the term. Meanwhile
The development at 51 Marsiling Road is on budget and on time to complete in 3Q18.
As at Sept 30, Net Asset Value per unit remains at $1.36 after valuation of portfolio.
Koh Wee Lih, CEO of AIMS AMP Capital Industrial REIT Management, says, “We are pleased to report an improvement in DPU this quarter. Our continued focus on proactive asset and lease management, and prudent investment strategy has allowed for a stable performance and distribution to unitholders.”
“However, the Singapore industrial property market still remains soft, with the oversupply situation continuing to exert a downward pressure on rentals and occupancy. Our focus moving forward is on managing capital and risk, and building a higher quality portfolio through asset enhancement initiatives and acquisitions,” adds Koh.
Units in AA Cap Industrial REIT closed at $1.46 on Wednesday.
