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AA Reit posts flat Q1 DPU at 2.5 Singapore cents

AIMS APAC Reit (AA Reit) posted a distribution per unit (DPU) of 2.5 Singapore cents for its first quarter ended June 30, unchanged from the year-ago period, the real estate investment trust’s manager said on Thursday morning.

Net property income (NPI) grew 18.1 per cent to S$22.9 million, from S$19.4 million in Q1 2019.

The higher NPI was mainly due to higher gross revenue and lower property operating expenses arising from the adoption of Financial Reporting Standard 116 (FRS 116). As a result, NPI margin increased to 75 per cent for Q1 2020, compared to 67.2 per cent for Q1 2019.

Gross revenue rose 5.8 per cent to S$30.6 million for the quarter, up from S$28.9 million a year ago. This was mostly because of maiden rental contribution from the property at 51 Marsiling Road from April 27, 2018, and higher rental and recoveries for the properties at 8 Tuas Ave 20, NorthTech, 103 Defu Lane 10 and 20 Gul Way.

The increase in revenue was partially offset by lower rental and recoveries for the property at 27 Penjuru Lane.

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Property operating expenses stood at S$7.6 million, down 19.4 per cent from a year ago, mainly due to land rent that was excluded due to the adoption of FRS, effective April 1.

Distributions to unitholders edged up 1.4 per cent to S$17.4 million.

For Q1 2020, the Reit manager is distributing 96.5 per cent of the Singapore taxable income available for distribution to the unitholders. These will be paid out on Sept 19, after the Aug 5 books closure date.

Total borrowings as at June 30 was S$499.3 million, up S$1.8 million from March 31, mainly due to a net drawdown of S$5 million primarily used to pay retention sums and development costs of recent development projects and other enhancement initiatives. This was largely offset by the decrease in Australian dollar-denominated borrowings as a result of the strengthening of the Singapore dollar against the Australian dollar.

As at July 25, the group had a portfolio of 27 industrial properties, comprising 25 in Singapore, one industrial property in Gold Coast, Queensland, Australia, and one business park in Macquarie Park, New South Wales, Australia.

Units of AA Reit closed flat at S$1.47 on Wednesday.

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