Aims Apac Reit Q1 DPU rises 1.3% to S$0.0231 on enlarged unit base

AIMS Apac Reit’s : O5RU 0% (AA Reit) distribution per unit (DPU) rose 1.3 per cent to S$0.0231 for its first quarter ended June on an enlarged unit base, its manager said on Thursday (Jul 27). In the previous corresponding period, DPU was S$0.0228.

The H1 DPU comprised an advanced distribution of S$0.018 for the Apr 1 to Jun 11 period, paid on Jul 20, and a balance distribution of S$0.0051 for the Jun 12 to 30 period, to be paid on Sep 22.

The enlarged unit base was the result of a S$100 million equity fundraising, the Reit manager said.

Gross revenue was up 4.5 per cent to S$43.2 million for the quarter, from S$41.3 million in the year-earlier period, while net property income grew 4.2 per cent on the year to S$32.3 million for the quarter, from S$31 million.

The manager attributed the rise in gross revenue and net property income to higher rental income from Singapore properties, partly offset by an increase in financing costs.

Distributable income rose 5.1 per cent year on year to S$17.2 million, from 16.3 million. The distribution will be paid out on Sep 22.

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As at Jun 30, the Reit’s gearing ratio fell to 32.9 per cent from 37 per cent. About 87 per cent of its borrowings are based on fixed rates.

The manager launched the S$100 million equity fundraising to reduce gearing and partly fund two asset enhancement initiatives in Singapore.

The proceeds were also used to repay S$67 million in debt facilities expiring in FY2025.

The manager noted that there are no refinancing requirements in FY2024.

Undrawn committed facilities, along with cash and bank balances, stood at S$182.4 million.

AA Reit’s portfolio occupancy rose to 98.1 per cent from 97.9 per cent in the same period the year before, supported by the Reit’s industrial and logistics and warehouse segments.

Its weighted average lease expiry stood at 4.3 years, and renewed leases had positive rental reversion of 38 per cent, mainly due to strong demand from third-party logistics providers.

In Q1, the Reit manager completed talks with a global advanced manufacturing company to turn one of its multi-let properties into a master tenanted one on a triple-net lease, which will span 10 years with built-in rental escalations.

“With the shift to a master lease, the leasable area of the property will increase by approximately 16 per cent and will result in incremental revenue to AA Reit,” the manager added.

It is also in advanced discussions with a major logistics tenant to renew a master lease for another five years.

AA Reit’s units were trading 0.8 per cent or S$0.01 higher at S$1.25 as at the midday trading break on Wednesday.