AIMS APAC REIT’s fiscal 2Q net property income climbed 17 percent

AIMS APAC REIT, or AA REIT, building at 51 Marsiling Road, Singapore, which is leased to Beyonics.AIMS APAC REIT, or AA REIT, building at 51 Marsiling Road, Singapore, which is leased to Beyonics.

AIMS APAC REIT reported Tuesday its fiscal second quarter net property income increased 16.6 percent on-year to S$22.49 million on higher gross revenue after an acquisition and lower property expenses.

Gross revenue for the quarter ended 30 September rose 4 percent on-year to S$30.60 million, the industrial REIT said in a filing to SGX.

The revenue increase was due to the maiden rental contribution from the recently acquired Boardriders Asia Pacific headquarters in Gold Coast, Australia, and higher rental and recoveries at NorthTech, 20 Gul Way, 8 Tuas Avenue 20 and 1 Bukit Batok Street 22, the REIT said.

The increase was partly offset by lower rental and recoveries at the 27 Penjuru Land property and from converting part of the 39 Tuas West Road property to multi-tenancy leases, AA REIT said.

The distribution per unit (DPU) for the quarter was 2.50 Singapore cents, unchanged on-year, AA REIT said.

Property operating expenses fell 19.9 percent on-year to S$8.11 million for the quarter on changes to accounting for leases, the REIT said

Portfolio occupancy fell to 92.2 percent in the quarter from 94.4 percent in the fiscal first quarter, mainly on transitioning master leases to multi-tenancy leases at some properties, AA REIT said. It noted JTC’s industrial average occupancy for the quarter was 89.3 percent.

For the fiscal first half, AA REIT reported net property income rose 17.3 percent on-year to S$45.43 million on gross revenue of S$61.18 million, up 4.9 percent on-year. The first-half DPU was 5.00 Singapore cents, unchanged on-year.

In its outlook, the REIT pointed to various geo-political uncertainties that could weigh on growth, including the U.K.’s Brexit and U.S.-China trade tensions.

“Negative developments on these issues could cause further disruptions to global supply chains and the Singapore economy would likely be impacted due to its dependence on trade and manufacturing activities. But being a regional hub, Singapore could potentially benefit from businesses reassessing their supply chains and sourcing locations,” the REIT said.

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