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AA Reit Q4 DPU up 4.6% to 2.75 S cents

AIMS Apac Reit (AA Reit) posted a higher distribution per unit (DPU) of 2.75 Singapore cents for its fourth quarter ending March 31, up 4.6 per cent from the year-ago period. AA Reit units closed unchanged at S$1.40 on Tuesday.

Net property income (NPI) rose 15 per cent year on year to S$20.3 million while revenue increased 6.7 per cent to S$29.9 million.

Distributions to unitholders rose 5.7 per cent to S$19 million, mainly due to higher net property income partly offset by a higher amount of distribution of income retained in the year-ago quarter.

Total DPU for FY2019 dipped 0.5 per cent to 10.25 Singapore cents, while total distributable income rose 4.6 per cent to S$70.5 million, mainly due to higher net property income.

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Gross revenue for fiscal 2019 was S$118.1 million, up one per cent or S$1.2 million compared to the previous year. This was primarily due to the maiden rental contribution from 51 Marsiling Road and higher rental contribution and occupancy rates at 8 Tuas Avenue 20. 

This was partially offset by lower rental and occupancies at 20 Gul Way, as six phases of the master leases reverted to multi-tenancy leases; lower rental and recoveries at 27 Penjuru Lane; as well as the loss of revenue from 10 Soon Lee Road following the divestment of the property on March 29, 2018.

AA Reit manager’s chief executive officer, Koh Wee Lih, said: “Although challenges remain in the operating environment, there are signs that the industrial market is stabilising.”

He added:  “Our redevelopment at 3 Tuas Avenue 2 and asset enhancement initiative at NorthTech are both on track for completion in the second half of the year and will further future-proof AA Reit as we work to adapt to changing tenant needs.

“We have also maintained our focus on prudent capital management throughout the year, by hedging 85.8 per cent of our portfolio’s interest rate exposure and maintaining our aggregate leverage at 33.7 per cent. In addition, we established a S$750 million Multicurrency Debt Issuance Programme in November 2018 to provide further flexibility in managing our capital structure.”