AIMS APAC REIT Review @ 17 May 2023

Basic Profile & Key Statistics

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

Key Indicators

Performance Highlight

For 2H, Gross revenue, NPI, distribution to unitholders and DPU increased YoY mainly due to higher income from existing properties and full contribution from Woolworths Headquarters which was completed on 15 November 2021.

Rental Reversion

Rent reversion for the 4Q FY23 is at +36.8% and for FY23 is at 18.5%.

Divestment

AAREIT announced the divestment of 541 Yishun Industrial Park A on 24 Apr. The sales price is at 8.2% above valuation and is expected to be completed by 3Q 2023.

Asset Enhancement Initiative

AEI for 23 Tai Seng Drive has been completed.

Related Parties Shareholding

• REIT Sponsor's Shareholding: Below median by 20% or more
• REIT Manager's Shareholding: Above median by 20% or more
• Directors of REIT Manager's Shareholding: Above median by 20% or more

Lease Profile

• Occupancy: ± 5% from median
• WALE: ± 10% from median
• Highest Lease Expiry within 5 Years: ± 10% from median; Falls in FY24
• Weighted Average Land Lease Expiry: Below median by 20% or more

Debt Profile

• Gearing Ratio: ± 10% from median
• Gearing Ratio including Perps: Above median by 20% or more
• Cost of Debt: ± 10% from median
• Fixed Rate Debt %: Above median by 10% or more
• Unsecured Debt %: Below median by 20% or more
• WADM: Above median by 10% or more
• Highest Debt Maturity within 5 Years: Above median by 20% or more; Falls in FY27
• Interest Coverage Ratio: Below median by 20% or more

Diversification Profile

• Top Geographical Contribution: Above median by 10% or more
• Top Property Contribution: Below median by 20% or more
• Top 5 Properties' Contribution: Below median by 10% or more
• Top Tenant Contribution: Above median by 20% or more
• Top 10 Tenants' Contribution: Above median by 20% or more

Key Financial Metrics

• Property Yield: Above median by 10% or more
• Management Fees over Operating Distributable Income: Above median by 20% or more; $3.85 distribution for every dollar paid 
• Operating Distributable Income on Capital: Below median by 10% or more
• Operating Distributable Income Margin: Below median by 20% or more
• Operating Distribution Proportion: Below median by 5% or more

DPU Breakdown

• TTM DPU Breakdown:
• 84.8% from Operation
• 15.2 from Management Fees Paid in Units

Trends

• Uptrend: Occupancy
• Flat: NAV per Unit
• Downtrend: DPU from Operation, Interest Coverage Ratio, Property Yield, Operating Distributable Income on Capital, Operating Distributable Income Margin

Relative Valuation

• P/NAV: Above +1SD for 1y; Average for 3y & 5y
• Dividend Yield: Average for 1y, 3y & 5y

Author's Opinion

Favorable	Less Favorable
Diversified Sector	Low REIT Sponsor's Shareholding
High REIT Manager's Shareholding	Short Weighted Average Land Lease Expiry
High Directors of REIT Manager's Shareholding	High Perpetual Securities %
High Occupancy	Low Unsecured Debt %
High Fixed Rate Debt %	Concentrated Debt Maturity
Long WADM	Low Interest Coverage Ratio
Low Top Property & Top 5 Properties' Contributions	High Top Top Geographical Contribution
High Property Yield	High Top Tenant & Top 10 Tenants' Contributions
Occupancy Uptrend	Non Competitive Management Fees
	Low Operating Distributable Income on Capital
	Low Operating Distributable Income Margin
	Low Operating Distribution Proportion
	DPU from Operation Downtrend
	Interest Coverage Ratio Downtrend
	Property Yield Downtrend
	Operating Distributable Income on Capital Downtrend
	Operating Distributable Income Margin Downtrend

In comparison to the previous quarter, the performance has remained similar. However, there has been an increase in DPU for 2H FY23 as compared to 1H FY23 despite a similar NPI. This increase is due to a higher proportion of management fees being received in units.  On a positive note, there is no refinancing requirement for the next 12 months while the fixed-rate debt proportion is at a high level of 88%. In addition, the rental reversion remains strong and the occupancy rate remains high, which should lead to a stable DPU for upcoming quarters, assuming that the manager continues to receive a similar proportion of management fees in units.

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 Review - List of previous REIT review posts

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my own findings and should not be considered as professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.