AIMS APAC REIT posts fiscal 1H net property income rose 19 percent, partly on acquisition

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 Wednesday its net property income for the fiscal first half rose 19.4 percent on-year to S$47.71 million, mainly on the rental contribution from the 7 Bulim Street property, acquired last year, and higher gross revenue from 20 Gul Way, 8 & 10 Pandan Crescent and 541 Yishun Industrial Park A.

Gross revenue for the six months ended 30 September increased 13 percent on-year to S$65.25 million, the industrial REIT said in a filing to SGX.

The distribution per unit (DPU) for the fiscal first half came in at 4.75 Singapore cents, up 18.8 percent from 4.0 Singapore cents in the year-ago period, the filing said. The DPU for the fiscal second quarter was 2.5 Singapore cents, up 25 percent from 2.0 Singapore cents in the year-ago period, the filing said.

The REIT’s leverage fell to 24.7 percent, compared with 33.9 percent at end-March, with undrawn committed facilities of S$151.8 million, the filing said. That followed the issuance of S$250 million of perpetual securities to diversify funding sources, and to pare debt, the filing said.

Portfolio occupancy for the REIT was at 97.3 percent, with the manager executing 26 new and renewal leases for around 6.2 percent of the portfolio’s net lettable area during the fiscal second quarter, the filing said.

“The healthy committed occupancy is expected to be sustained, as strong demand for logistics and warehouse facilities continue to be
underpinned by e-commerce, stockpiling and shifts in supply chain,” AA REIT said.

Woolworths property acquisition

At end-September, AA REIT announced the proposed acquisition of the Woolworths headquarters in Australia for A$463.25 million.

Russell Ng, the CEO-designate for the REIT’s manager, said broadening the portfolio’s geographic diversity will allow the REIT to stay resilient amid the pandemic.

“Our proposed acquisition of Woolworths HQ represents our third investment into Australia, and will further strengthen AA REIT’s foothold in Sydney’s resilient business park market. Our high quality asset base also continues to be driven by the logistics and warehouse sector, which represents just over half of the portfolio,” Ng said in the statement.

Outlook

The REIT issued a cautiously optimistic outlook.

“Despite the uncertainties in the global pandemic, the Singapore and Australian economies both reported stronger than expected recovery. Furthermore, factors such as rising rentals and prices of industrial space underpinned by the manufacturing sector, and business park demand driven by office decentralisation have continued to reinforce the resilience of the industrial sector,” AA REIT said.

“However, the supply of new industrial space already in the pipeline may moderate rental growth,” the REIT added.

On a macro level, AA REIT also noted concerns about resurgent infections and rising death tolls from Covid-19 in some parts of the world, as well as the possibility a slower-than-expected vaccine rollout could allow the virus to mutate further.