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REITs investment & personal finance


Friday, May 07, 2021

AIMS APAC REIT Review @ 7 May 2021

Basic Profile & Key Statistics

AIMS APAC REIT (AAREIT) is a diversified REIT that invests in Business Park, Industrial, Logistic properties. AAREIT owns 28 properties in Singapore and Australia.  

Performance Highlight

Gross revenue and NPI increased YoY by 16.1% and 17% respectively mainly due to contribution from 7 Bulim Street, higher rental and recoveries for the properties at 3 Tuas Avenue 2, 20 Gul Way and 27 Penjuru Lane. Distribution to unitholders and DPU increased YoY by 45% due to the release of S$ 1.1 million remaining retention from 4Q FY2020, Distribution retained in previous quarters of FY2021  as well as higher income in 4Q FY2021.
Rental reversion is positive at 2.3%.

There is no update for the acquisition of 315 Alexandra Road at this moment. 

Related Parties Shareholding

  • REIT sponsor's shareholding is low at 5.32%
  • REIT manager's shareholding is low at 0.61%
  • Directors of REIT manager's shareholding is high at 8.01%

Lease Profile

  • Occupancy is moderate at 95.4%
  • WALE is moderate at 3.95 years
  • Highest lease expiry within 5 years is low at 23.3% which falls in FY2024
  • Weighted average land lease expiry is short at 41.17 years 

Debt Profile

  • Gearing ratio is slightly low at 33.9%
  • Cost of debt is high at 3%
  • Fixed rate debt % is slightly high at 78.3%
  • Unsecured debt % is low at 25%
  • WADM is slightly short at 2.3 years
  • Highest debt maturity within 5 years is high at 37.5% which falls in FY2025
  • Interest coverage ratio is moderate at 4 times
  • Preferred/Perpetual Securities over Debts is high at 17.4%

Diversification Profile

  • Top geographical contribution is high at 88.6%
  • Top property contribution is low at 14.4%
  • Top 5 properties contribution is slightly low at 54%
  • Top tenant contribution is high at 13.1% 
  • Top 10 tenants contribution is high at 47.3% 

Key Financial Metrics

  • Property yield is high at 6% 
  • Management fees over distribution is moderate at 13.3% in which unitholders receive S$ 7.52 for every dollar paid 
  • Distribution on capital is high at 3.9%
  • Distribution margin is moderate at 45.7%

Trends

  • Slight Downtrend - NAV per Unit, Property Yield
  • Downtrend - DPU, Interest Coverage Ratio, Distribution on Capital, Distribution Margin

Relative Valuation

  • Dividend Yield - Latest 4 quarters DPU @ 8.95 cents / average yield @ 7.47% = S$ 1.20. 
  • Price/NAV - NAV @ S$ 1.36 x average P/NAV @ 0.99 = S$ 1.35


Author's Opinion

 Favorable Less Favorable
Diversified SectorLow REIT Sponsor's Shareholding
High Directors of REIT Manager's ShareholdingLow REIT Manager's Shareholding
Well Spread Lease ExpiryShort Weighted Average Land Lease Expiry
Low Top Property ContributionHigh Cost of Debt
High Property YieldLow Unsecured Debt %
High Distribution on CapitalConcentrated Debt Maturity
 High Perpetual Securities %
 High Top Geographical Contribution
 High Top Tenant & Top 10 Tenants Contributions
 DPU Downtrend
 Interest Coverage Ratio Downtrend
 Distribution on Capital Downtrend
 Distribution Margin Downtrend

On a QoQ basis, the performance is slightly improved. However, the distribution in this quarter is increased because AAREIT released the retained distribution from previous quarters of FY2021 and the remaining retained distribution from 4Q FY2020. Moving forward, performance should be improved after the acquisition of 315 Alexandra Road.


For more information, you could refer to:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

REIT-TIREMENT Patreon - Support as a Patron and get SREITs Dashboard PDF or Data Excel

REIT-TIREMENT Facebook Page - Support by liking my Facebook Page

REIT Investing Community - Facebook Group where members share and discuss REIT topic


*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.

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