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AIMS APAC REIT posts 1HFY2023 DPU of 4.70 cents, down 1.1% y-o-y

Felicia Tan
Felicia Tan10/26/2022 08:04 AM GMT+08  • 4 min read
AIMS APAC REIT posts 1HFY2023 DPU of 4.70 cents, down 1.1% y-o-y
AA REIT’s record date is on Nov 4. Distributions will be payable on Dec 23. Photo: AA REIT
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AIMS APAC REIT (AA REIT) has reported a distribution per unit (DPU) of 4.70 cents for the 1HFY2023 ended Sept 30, 1.1% lower than the DPU of 4.75 cents in the corresponding period the year before.

Distributions to unitholders for the six-month period inched by up 0.4% y-o-y to $33.7 million.

Excluding the one-off reversal of about $642,000 of additional rental relief provision in relation to the Covid-19 (Temporary Measures) Act 2020, distributions to unitholders for the period would have increased by 2.3% y-o-y.

Correspondingly, DPU for the 1HFY2022 would have increased by 0.9% y-o-y instead.

During the 1HFY2023, gross revenue increased by 27.5% y-o-y to $83.2 million while net property income (NPI) rose 28.2% y-o-y to $61.1 million. Both increases were attributable to contributions from the REIT’s acquisition of Woolworths HQ, which was completed in November 2021. The higher rental income and recoveries from existing Singapore properties including 29 Woodlands Industrial Park E1, 20 Gul Way, 15 Tai Seng Drive, 8 & 10 Pandan Crescent, 8 Tuas Avenue 20 and 27 Penjuru Lane also contributed to the higher gross revenue and NPI for the half-year period.

As at Sept 30, AA REIT’s portfolio occupancy stood at 97.5%, down by 0.4 percentage points q-o-q.

See also: ParkwayLife REIT reports 2.1% rise in FY2022 DPU

Its weighted average lease expiry (WALE) stood at 4.8 years by gross rental income (GRI).

The REIT’s tenant retention rate stood at 85.4% based on trailing 12 months and by net lettable area (NLA).

Over the six-month period, the REIT manager executed 21 new leases spanning 17,703 sqm and 26 renewal leases spanning 35,219 sqm, representing 6.7% or 52,922 sqm of the portfolio’s total NLA.

See also: Starhill Global REIT report 2.2% rise in DPU in 1HFY2023

The REIT reported positive rental reversions of 8.1% for the 1HFY2023.

As at Sept 30, AA REIT’s aggregate leverage stood at 36.5%. About 88% of the REIT’s total debt has been hedged into fixed rates, which will mitigate the impact of rising interest rates.

Net asset value (NAV) per unit stood at $1.40 as at Sept 30.

Cash and cash equivalents stood at $15.7 million as at Sept 30.

“Our portfolio continued to deliver a set of steady performance despite the growing economic headwinds, a testament of our high-quality assets and our proactive asset and leasing management. The increasing market uncertainties have also highlighted the importance of portfolio resilience, and we are pleased to advance on our sustainability efforts through our partnership with SP Group to install large-scale rooftop solar system across six of our Singapore properties,” says Russell Ng, CEO of the manager.

“Nonetheless, we remain mindful of the volatile operating environment, and our prioritisation is on organic growth initiatives, including driving building occupancy, rental optimisation and potential asset enhancement initiatives. At the same time, we will continuously strengthen our portfolio to support the changing needs of our tenants and the industry. This includes improving the sustainability and energy efficiency of our properties which we believe will translate into long-term cost savings,” he adds.

George Wang, chairman of the manager says, “It is important for us to execute a deliberate and prudent management strategy to navigate uncertainties in the current environment. We are monitoring the market closely, and will adopt a patient and disciplined approach, while keeping vigilant and nimble to anticipate and adapt to market conditions. We will continue to ensure that our portfolio is well-positioned to capitalise on the opportunities arising from the changing market in the future.”

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Looking ahead, the REIT manager says it will remain focused on active asset and lease management to maintain a stable occupancy for its Singapore portfolio.

“Whilst inflationary pressures and rising energy costs are expected to increase operational expenses, the manager will implement energy-efficient measures to alleviate these costs. The manager is also actively evaluating organic growth opportunities by way of asset enhancements initiatives,” reads the statement on Oct 26.

AA REIT’s record date is on Nov 4. Distributions will be payable on Dec 23.

Units in AA REIT closed 3 cents higher or 2.66% up at $1.16 on Oct 25.

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