AA Reit's Q3 DPU drops 5.4%

AIMS AMP Capital Industrial Reit (AA Reit) recorded a distribution per unit (DPU) of 2.62 Singapore cents for its third quarter 2018, down 5.4 per cent from 2.77 cents previously.

Gross revenue fell 4.9 per cent from a year ago to S$28.9 million, mainly due to lower rental and recoveries from 20 Gul Way, as five phases of the property reverted to multi-tenancy leases, and the expiry of the master lease at 3 Tuas Avenue 2.

Net property income declined 2.8 per cent to S$19.2 million, while distribution to unitholders dipped 3.5 per cent to S$17.1 million compared to a year ago.

While the industrial oversupply situation is expected to continue into 2018 and may continue to put downward pressure on rentals and occupancy, the Reit's manager said it is focused on active asset and lease management, and unlocking organic value within the portfolio through asset enhancement initiatives and redevelopments.

Koh Wee Lih, CEO of AA Reit's manager, said: "As part of this strategy, we are constantly evaluating our assets and identifying opportunities to build a higher quality portfolio and unlock further value for our unitholders."

He added that the Reit will continue to prudently manage capital and to optimise the portfolio through sector and tenant diversification across its portfolio of 27 properties.

The group has a portfolio of 27 industrial properties, 26 of which are located throughout Singapore and one business park property in Macquarie Park, New South Wales, Australia.