AIMS APAC REIT Review @ 4 August 2023

Basic Profile & Key Statistics

• Main Sector(s): Logistics, Industrial & Office
• Country(s) with Assets: Singapore & Australia
• No. of Properties (exclude associate/fund): 29

Key Indicators

Performance Highlight

Gross revenue, NPI, distribution to unitholders and DPU increased YoY mainly due to higher income from existing properties.

Rental Reversion

AAREIT has achieved a significantly high rental reversion of 38% for Singapore assets, mainly contributed by logistics and warehouse properties. 

Divestment

AAREIT announced the divestment of 541 Yishun Industrial Park A on 24 Apr. The sales price is at 8.2% above valuation and is expected to be completed by 3Q 2023.

Related Parties Shareholding

• REIT Sponsor's Shareholding: Below median by 20% or more
• REIT Manager's Shareholding: Above median by 20% or more
• Directors of REIT Manager's Shareholding: Above median by 20% or more

Lease Profile

• Committed Occupancy: ± 5% from median
• WALE: Above median by 10% or more
• Highest Lease Expiry within 5 Years: Below median by 10% or more; Falls in FY26
• Weighted Average Land Lease Expiry: Below median by 20% or more

Debt Profile

• Gearing Ratio: Below median by 10% or more
• Gearing Ratio including Perps: Above median by 20% or more
• Cost of Debt: ± 10% from median
• Fixed Rate Debt %: Above median by 10% or more
• Unsecured Debt %: Below median by 20% or more
• WADM: ± 10% from median
• Highest Debt Maturity within 5 Years: Above median by 20% or more; Falls in FY27
• Interest Coverage Ratio: Below median by 20% or more

Diversification Profile

• Top Geographical Contribution: Above median by 20% or more
• Top Property Contribution: Below median by 20% or more
• Top 5 Properties' Contribution: ± 10% from median
• Top Tenant Contribution: Above median by 20% or more
• Top 10 Tenants' Contribution: Above median by 20% or more

Key Financial Metrics

• Property Yield: Above median by 10% or more
• Management Fees over Operating Distributable Income: Above median by 20% or more; $3.82 distribution for every dollar paid 
• Operating Distributable Income on Capital: Below median by 10% or more
• Operating Distributable Income Margin: Below median by 20% or more
• Operating Distribution Proportion: Below median by 5% or more

DPU Breakdown

• TTM DPU Breakdown:
• 83.1% from Operation
• 16.9 from Management Fees Paid in Units

Trends

• Uptrend: Committed Occupancy
• Flat: NAV per Unit
• Downtrend: DPU from Operation, Interest Coverage Ratio, Property Yield, Operating Distributable Income on Capital, Operating Distributable Income Margin

Relative Valuation

• Dividend Yield: Above +1SD for 1y & 5y; Above +2SD for 3y
• P/NAV: Average for 1y, 3y & 5y

Author's Opinion

Favorable	Less Favorable
Diversified Sector	Low REIT Sponsor's Shareholding
High REIT Manager's Shareholding	Short Weighted Average Land Lease Expiry
High Directors of REIT Manager's Shareholding	High Perpetual Securities %
High Committed Occupancy	Low Unsecured Debt %
Long WALE	Concentrated Debt Maturity
Well Spread Lease Expiry	Low Interest Coverage Ratio
Low Gearing Ratio	High Top Geographical Contribution
High Fixed Rate Debt %	High Top Tenant & Top 10 Tenants' Contributions
Low Top Property Contribution	Non Competitive Management Fees
High Property Yield	Low Operating Distributable Income on Capital
Committed Occupancy Uptrend	Low Operating Distributable Income Margin
	Low Operating Distribution Proportion
	DPU from Operation Downtrend
	Interest Coverage Ratio Downtrend
	Property Yield Downtrend
	Operating Distributable Income on Capital Downtrend
	Operating Distributable Income Margin Downtrend

In the current quarter, both gross revenue and net property income (NPI) have shown slight improvements compared to the previous quarter, However, distribution and DPU have decreased, although specific details were not provided. Regarding the recent equity fund raising of S$ 100 million, S$ 97 million has already been utilized to repay existing debt while pending to use it for AEIs. Consequently, there is no need for refinancing until July 2024.

You could also refer below for more information:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and detail of Singapore REIT

REIT Review - List of previous REIT review posts

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my own findings and should not be considered as professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.