AIMS APAC REIT (AA REIT) has reported a distribution per unit (DPU) of 4.65 cents for the 1HFY2024 ended Sept 30, 1.1% lower y-o-y.
The lower DPU comes in spite of the 7.1% y-o-y increase in 1HFY2024 distributable income, which stood at $36.1 million, as the REIT’s unit base expanded by 12.8% y-o-y to 810.1 million units. The REIT had conducted an equity fund raising (EFR) which was completed in July this year.
Gross revenue rose by 4.4% y-o-y to $86.8 million due to the higher rental and recoveries from the REIT’s logistics, warehouse and industrial properties. Revenue growth was partly offset by the lower revenue from the REIT’s Australian properties due to the weaker Australian dollar (AUD).
Net property income (NPI) rose by 5.1% y-o-y to $64.3 million due to the higher gross revenue while NPI margin increased by 0.5 percentage points y-o-y to 74.0%.
As at Sept 30, the REIT’s portfolio occupancy improved by 0.6 percentage points y-o-y to 98.1%. Its weighted average lease expiry (WALE) stood at 4.2 years, down from 4.8 years in the corresponding period the year before.
In the 1HFY2024, the REIT’s rental reversion stood at a positive 37.7% with a tenant retention rate of 70.1%. The manager had also executed 12 new and 26 renewal leases totalling some 103,063 sqm, or 13.1% of the portfolio’s net lettable area (NLA). For the remainder of FY2024, approximately 105,037 sqm is due for expiry, of which 100,926 sqm is in the logistics and warehouse segment.
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Aggregate leverage stood at 32.1%.
As at Sept 30, cash and cash equivalents stood at $17.3 million.
“We are pleased to report another set of robust performance in the face of uncertain macroeconomic conditions. Our strong operational metrics are reflective of our high-quality portfolio assets, diversified quality tenant base and proactive asset management strategies that aims to meet our target occupier requirements and capture maximum rental reversions,” says Russell Ng, CEO of the manager. “We remain confident in the defensiveness of our portfolio and see bright spots in our markets, where demand for logistics and high-spec industrial spaces, amid a tight supply situation, will continue to drive resilient returns. Overall, we remain disciplined in executing our strategies to enhance returns for unitholders.”
“In evolving and volatile markets where interest rates are likely to remain higher for longer, it is important for AA REIT to maintain a prudent and conservative balance sheet. The completion of our recent EFR fortifies our balance sheet, provides funding for near term organic growth initiatives, whilst providing AA REIT with financial flexibility to capture opportunities amid an uncertain environment,” adds George Wang, chairman of the manager. “At the same time, we will continue to build on our proven track record to unlock untapped potential to strengthen and optimise our portfolio to deliver long-term sustainable returns to our unitholders.”
In its outlook statement, the REIT manager has indicated its confidence in the REIT’s high-quality assets and the on-going execution of its four strategic pillars.
“Operational performance and occupancy of the Singapore assets are well-supported by encouraging rental growth and sustained demand for quality industrials and logistics space. In Australia, strong tenant covenants on long lease terms and built-in rental escalations continue to bolster income stability of the portfolio, amid volatile macroeconomic conditions,” says the manager in its Nov 3 statement.
Unitholders will receive their DPUs on Dec 22.
As at 11.25am, units in AA REIT are trading flat at $1.25.
