AIMS APAC REIT's 2H FY25 Result Review

Basic Profile & Key Statistics

Key Indicators

Performance Highlight

AAREIT reported higher year-on-year gross revenue, supported by stronger rental contributions from its Singapore portfolio. This was partially offset by reduced income from 7 Clementi Loop, which is undergoing asset enhancement works, and the depreciation of the Australian dollar against the Singapore dollar. Despite the revenue growth, net property income (NPI) saw a slight decline due to higher property expenses. Nonetheless, distribution income and distribution per unit (DPU) improved year-on-year, aided by a higher proportion of management fees paid in units, lower trust expenses, higher foreign exchange gain, and the release of retained earnings.

Rental Reversion

The REIT recorded strong rental reversion for its Singapore assets, with 3Q and 4Q FY2025 achieving 28.2% and 15.5% respectively. For the full year, the rental reversion stood at a robust 20%.

Divestment

In December 2024, AAREIT announced the proposed divestment of 3 Toh Tuck Link at a 32.5% premium to the latest valuation. 

Asset Enhancement Initiatives

AAREIT currently has two ongoing AEIs in Singapore. The AEI at 15 Tai Seng Drive remains on track for completion in 1Q FY2026. However, the completion of 7 Clementi Loop has been delayed to 2Q FY2026. Additionally, an AEI has been announced for Optus Centre in Australia, which includes the construction of a premium event space.

Related Parties Shareholding

• REIT Sponsor's Shareholding: Less Favorable
• REIT Manager's Shareholding: Favorable
• Directors of REIT Manager's Shareholding: Favorable

Lease Profile

• Occupancy: Moderate
• Highest Annual Lease Expiry in 4 Years: Moderate
• WALE: Moderate
• Weighted Average Land Lease Expiry: Less Favorable

Debt Profile

• Adjusted Interest Coverage Ratio: Less Favorable
• Cost of Debt: Moderate
• Gearing Ratio: Favorable
• Hybrids over Debts + Hybrids: Less Favorable
• Fixed Rate Debt Proportion: Favorable
• Unsecured Debt Proportion: Less Favorable
• Highest Annual Debt Maturity in 4 Years: Less Favorable
• WADM: Moderate

Diversification Profile

• Major Sector Weightage: Favorable
• Top Geographical Weightage: Less Favorable
• Top Property Weightage: Favorable
• Top 5 Properties' Weightage: Moderate
• Top Tenant Weightage: Moderate
• Top 10 Tenants' Weightage: Less Favorable

Key Financial Metrics

• Property Yield: Favorable
• Manager's Fees over Operating Distributable Income: Less Favorable
• Operating Distributable Income on Capital: Favorable
• Operating Distributable Income Margin: Moderate
• Operating Distribution Proportion: Moderate

DPU Breakdown

• TTM Distribution Breakdown:
• 90.8% from Operation
• 9.2% from Management Fees Paid in Units

Trends (Up to 10 Years)

• Uptrend: Committed Occupancy
• Slight Uptrend: None
• Flat: None
• Slight Downtrend: Property Yield
• Downtrend: DPU from Operations, NAV per Unit, Adjusted Interest Coverage Ratio, Top 5 Properties' Weightage, Top 10 Tenants' Weightage, Operating Distributable Income over Manager's Fees, Operating Distributable Income on Capital, Operating Distributable Income Margin, Operating Distribution Proportion

Price Range & Relative Valuation Metrics

• Dividend Yield: Average for 1y, 3y, 5y & 10y
• P/NAV: Above +1SD for 1y, 3y & 5y; Average for 10y

Author's Opinion

Compared to the previous half-year, gross revenue remained stable, although NPI experienced a minor decline due to increased property expenses. Nevertheless, DPU saw an improvement, largely attributed to lower borrowing costs and the release of retention held in the previous half year. On the debt front, there is no refinancing need in the coming fiscal year.

For more information, check out:

S-REITs Dashboard - Detailed information on individual Singapore REIT

S-REITs Data - Overview and detail of Singapore REITs

S-REIT Comparison - Comparison among Singapore REITs

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 findings and should not be considered 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.