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Monday, February 14, 2022

AIMS APAC REIT Review @ 14 February 2022

Basic Profile & Key Statistics

AIMS APAC REIT (AAREIT) is a diversified REIT that invests in Business Park, Industrial, Logistics properties. AAREIT owns 29 properties in Singapore and Australia.

Performance Highlight

Gross revenue NPI and distributable income increased YoY due to rental contribution from Woolworths HQ and higher gross revenue from 20 Gul Way, 27 Penjuru Lane and 541 Yishun Industrial Park A. 

Rental Reversion
Rental reversion for the quarter is at +0.2%

Acquisition
On 15 Nov 2021, AAREIT completed the acquisition of Woolworths HQ in Sydney. For the proposed acquisition of  315 Alexandra Road which was announced in January 2021, there is still no update at this moment. 

Related Parties Shareholding

    

  • REIT sponsor's shareholding is low at 6.411%
  • REIT manager's shareholding is slightly high at 1.169%
  • Directors of REIT manager's shareholding is high at 8.572%

Lease Profile

  • Occupancy is high at 97.6%
  • WALE is long at 4.85 years
  • Highest lease expiry within 5 years is low at 21.7% which falls in FY24
  • Weighted average land lease expiry is short at 40.64 years

Debt Profile

  • Gearing ratio is moderate at 37.3%. Include perps, gearing ratio is at 53.9%.
  • Cost of debt is high at 2.8%
  • Fixed rate debt % is low at 57%
  • Unsecured debt % is low at 31.9%
  • WADM is long at 3.2 years
  • Highest debt maturity within 5 years is high at 41.3% which falls in FY27
  • Interest coverage ratio is low at 3.3 times
  • Preferred/perpetual securities over debt is high at 30.9%

Diversification Profile

  • Top geographical contribution is high at 84.8% 
  • Top property contribution is low at 13.1% 
  • Top 5 properties contribution is low at 43.3% 
  • Top tenant contribution is slightly high at 13.4% 
  • Top 10 tenants contribution is high at 47.9%

Key Financial Metrics

  • Property yield is high at 6%
  • Management fees over distribution is low at 12.5 % in which unitholders receive S$ 8.00 for every dollar paid 
  • Distribution on capital is slightly high at 3.9%
  • Distribution margin is moderate at 46.4%

Trends

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

Relative Valuation

  • P/NAV - Below average for 1y; Average for 3y & 5y
  • Dividend Yield - Above +1SD for 1y; Average for 3y & 5y

Author's Opinion

 Favorable Less Favorable
Diversified SectorLow REIT Sponsor's Shareholding
High Directors of REIT Manager's ShareholdingShort Weighted Average Land Lease Expiry
High OccupancyHigh Cost of Debt
Long WALELow Fixed Rate Debt %
Well Spread Lease ExpiryLow Unsecured Debt %
Long WADMConcentrated Debt Maturity
Low Top Property & Top 5 Properties ContributionsLow Interest Coverage Ratio
High Property YieldHigh Perpetual Securities %
Competitive Management FeesHigh Top Geographical Contribution
 High Top 10 Tenants Contribution
 DPU Downtrend
 Interest Coverage Ratio Downtrend
 Distribution on Capital Downtrend
 Distribution Margin Downtrend

As compared to the previous quarters, gross revenue and NPI has improved after the acquisition of Woolworths HQ. However, distributable income and DPU are lower as compared to the previous quarter, no detail was provided. Do note that AAREIT currently has the highest perpetual securities to total debts ratio (total debts = borrowings + perpetual securities) among Singapore REITs. 


You could also refer below for more information:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts


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*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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