AIMS APAC REIT (AA REIT) has reported a distribution per unit (DPU) of 6.99 cents for the 9MFY2024 ended Dec 31, 2023, 4.1% lower y-o-y.
The DPU drop is attributable to the higher number of units, which was up by 12.5% y-o-y to 810.6 million compared to the 720.3 million units in the 9MFY2023. The new units were in relation to the equity fund raising which comprises a $70 million private placement completed on June 12, 2023 and a $30 million preferential offering completed on July 3, 2023.
Distributions to unitholders rose by 5.2% y-o-y to $55.1 million as gross revenue and net property income (NPI) rose.
Gross revenue was up by 5.1% y-o-y to $131.6 million due to a higher portfolio occupancy, positive rental reversions and high tenant retention rate across the group’s Singapore properties.
NPI also rose by 6.3% y-o-y to $97.8 million with NPI margin up by 0.8 percentage points y-o-y at 74.3%.
As at Dec 31, 2023, portfolio occupancy stood at 98.1%, up from 97.8% in the same period the year before, while weighted average lease expiry (WALE) stood at 4.6 years, up from 4.5 years as at Dec 31, 2022.
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Rental reversion for the 3QFY2024 was up by 13.0%, down from the 21.2% reversion rate in the 3QFY2023.
Aggregate leverage stood at 32.2% as at Dec 31, 2023, down from 36.4% as at Dec 31, 2022. The REIT’s borrowings on fixed rates stood at 76%.
“We are pleased to report continued strong operating performance. The active asset management of our portfolio has resulted in resilient occupancy at around 98% and sustained demand from national and global corporates,” says Russell Ng, CEO of the manager. “The recent signing of our two master leases with KWE and Aalst Chocolate is a testament to our proactive leasing strategy, strong tenant relationships and commitment to ongoing rejuvenation of our portfolio.”
“With a strengthened balance sheet amid tight supply for high quality logistics and high-spec industrial spaces, we are well placed to execute on our asset enhancement initiatives (AEIs) and future growth opportunities,” he adds.
“Against the uncertain macro backdrop, we will continue to maintain a disciplined capital management policy and conservative balance sheet. It is important that we continue to monitor growth opportunities, whether through acquisitions or organically via AEIs,” says George Wang, chairman of the manager.
“We have a proven track record to be proud of and are confident that we can capitalise on opportunities by executing the projects in our pipeline. Our focus remains on optimising our portfolio and delivering long-term sustainable returns for our unitholders,” he adds.
In its outlook statement, the REIT sees rental growth remaining on an upward trend in Singapore and is expected to continue albeit at a more moderate pace.
The limited supply of modern industrial facilities is likely to drive a “flight to quality” trend in 2024, particularly from high-tech, in-demand industries such as biomedical and advanced manufacturing.
In Australia, the REIT’s two business parks in Sydney continue to benefit from significant infrastructure investments. When the Sydney Metro opens in mid-2024, commuters will be able to travel from the city to Macquarie Park, where the REIT’s business park is located, in just 18 minutes. The Brisbane 2032 Olympic and Paralympic Games will also “advantageously impact the Boardriders APAC HQ which is strategically positioned to benefit from the positive flow on effect of migration, enhanced connectivity and increased economic activity within the region”.
Despite the uncertain macroeconomic environment, AA REIT’s manager remains confident in its portfolio, reads the REIT’s statement put out on Jan 31.
Unitholders will receive their DPUs on March 22.
Units in AA REIT closed 1 cent higher or 0.78% up at $1.29 on Jan 30.
