REIT-TIREMENT - REITs Investing & Personal Finance

REITs investment & personal finance


Sunday, May 15, 2022

AIMS APAC REIT Review @ 15 May 2022

Basic Profile & Key Statistics
  • Main Sector(s): Logistics, Industrial & Office
  • Country(s) with Assets: Singapore & Australia
  • No. of Properties (exclude development/associate/fund): 29

Performance Highlight

2H gross revenue and NPI increased mainly due to contribution from the Woolworths HQ acquired in November 2021. The decline in distribution to unitholders and DPU are mainly due to the release of retention amounting to S$ 1.1mil in 2H FY2021.

Rental Reversion
Rental reversion is positive for 4Q FY2022.

Acquisition
The target date has been extended to 8 Jun 2022 to reach an agreement and seek regulatory approval. The above screenshot is from the acquisition presentation on 27 Jan 2021, which is a year ago.

Related Parties Shareholding

  • REIT sponsor's shareholding: Below median for more than 20%
  • REIT manager's shareholding: Above median for more than 20%
  • Directors of REIT manager's shareholding: Above median for more than 20%

Lease Profile

  • Occupancy: ± 5% from median
  • WALE: Above median for more than 20%
  • Highest lease expiry within 5 years: ± 10% from median; Falls in FY24
  • Weighted average land lease expiry: Below median for more than 20%

Debt Profile

  • Gearing ratio: ± 10% from median
  • Gearing ratio including perps: Above median for more than 20%
  • Cost of debt: Above median for more than 10%
  • Fixed rate debt %: Below median for more than 10%
  • Unsecured debt %: Below median for more than 20%
  • WADM: Above median for more than 10%
  • Highest debt maturity within 5 years: Above median for more than 20%; Falls in FY27
  • Interest coverage ratio: Below median for more than 20%

Diversification Profile

  • Top geographical contribution: Above median for more than 20%
  • Top property contribution: Below median for more than 20%
  • Top 5 properties' contribution: Below median for more than 20%
  • Top tenant contribution: Above  median for more than 20%
  • Top 10 tenants' contribution: Above median for more than 20%

Key Financial Metrics

  • Property yield: Above median for more than 10%
  • Management fees over distribution: Above median for more than 20%; $4.59 distribution for every dollar paid 
  • Distribution on capital: ± 10% from median
  • Distribution margin: Below median for more than 10%

Trends

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

Relative Valuation

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

Author's Opinion

 Favorable Less Favorable
Diversified SectorLow REIT Sponsor's Shareholding
High REIT Manager's ShareholdingShort Weighted Average Land Lease Expiry
High Directors of REIT Manager's ShareholdingHigh Perpetual Securities %
High OccupancyHigh Cost of Debt
Long WALELow Fixed Rate Debt %
Long WADMLow Unsecured Debt %
Low Top Property & Top 5 Properties ContributionsConcentrated Debt Maturity
High Property YieldLow Interest Coverage Ratio
 High Top Geographical Contribution
 High Top Tenant & Top 10 Tenants Contributions
 Non Competitive Management Fees
 Low Distribution Margin
 DPU Downtrend
 Interest Coverage Ratio Downtrend
 Property Yield Downtrend
 Distribution on Capital Downtrend
 Distribution Margin Downtrend

Performance has improved as compared to the previous quarter due to the full contribution from Woolworths HQ. Due to the high perpetual securities proportion, the gearing including perps is high at 53+%. And due to the high coupon rate (>5%), AAREIT interest coverage is affected as well.


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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