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AIMS APAC REIT posts 20% y-o-y decline in 1Q21 DPU to 2.00 cents

Felicia Tan
Felicia Tan • 3 min read
AIMS APAC REIT posts 20% y-o-y decline in 1Q21 DPU to 2.00 cents
The manager of AIMS APAC REIT (AA REIT) has announced a distribution per unit (DPU) of 2.00 cents for 1Q21 ended June.
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The manager of AIMS APAC REIT (AA REIT) has announced a distribution per unit (DPU) of 2.00 cents for 1Q21 ended June, down 20% from the 2.50 cents posted a year ago.

Distributable income for the quarter fell 18.6% y-o-y to $14.1 million, which represents some 95.5% of the REIT’s Singapore taxable income available for distribution.

The $14.1 million comprises taxable income of $10.9 million from the REIT’s Singapore operations and tax-exempt income and capital distribution of $3.2 million from the group’s investment in Optus Centre and Boardriders Asia Pacific HQ in Australia.

Gross revenue for 1Q21 fell 10.9% y-o-y to $27.2 million mainly due to an estimated provision for rental waivers for eligible tenants of some $2.6 million, as well as lower contributions from 1A International Business Park and 20 Gul Way. The decline was also attributed to the expiry of two phases of the master lease at 30 Tuas West Road and the master lease at 541 Yishun Industrial Park A.

Property operating expenses for the quarter increased 12.6% y-o-y to $8.6 million due to higher costs from the conversion of the master lease to multi-tenancy leases for 1A International Business Park and 20 Gul Way, as well as the expiry of master leases. The increase in expenses was also due to the full quarter property operating expenses incurred for the recently completed property at 3 Tuas Avenue 2.

Consequently, net property income (NPI) for 1Q21 fell 18.8% y-o-y to $18.6 million. NPI margin fell 6.6 percentage points y-o-y in 1Q21.

AA REIT’s share of profits fell 1.7% y-o-y, which comprised contribution from its 49% interest in Optus Centre.

Portfolio occupancy increased to 93.6% from the last quarter’s 89.4%, which puts the REIT above the industrial average of 89.2%. The higher occupancy was buoyed by the logistics and warehouse segment, which comprises nearly half of the total gross rental income for 1Q21.

As at June 30, the REIT has a weighted average lease expiry (WALE) of 4.41 years. Cash and cash equivalents stood at $20.1 million.

“Underpinned by our resilient portfolio, we achieved a stable performance amidst the headwinds brought about by COVID19. This is mainly attributed to our large base of tenants in essential services which comprise over 50% of the portfolio by gross rental income,” says Koh Wee Lih, CEO of the manager.

“As economies reopen and businesses recommence operations, we are experiencing increased interest for industrial space, especially for logistics and warehouse facilities, largely driven by the e-commerce trends which have accelerated during this COVID-19 period,” he adds.

“During the quarter, we also achieved a significant milestone with our inclusion into the MSCI Singapore Small Cap Index. Being elevated to the position of an index component allows us to reach out to a larger pool of investors and raise our profile in the international investment community.”

Units in AA REIT closed 1 cent lower, or 0.8% down, at $1.21 on Wednesday.

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