Aims Apac Reit’s H1 DPU slips 1.1% to S$0.0465 on enlarged unit base

AIMS Apac Reit : O5RU 0%’s (AA Reit) distribution per unit (DPU) for the first half ended September fell 1.1 per cent to $0.0465 from its H1 FY2023 DPU of S$0.047, despite registering topline growth for the period.

The overall DPU decline was due to an enlarged unit base following an equity fundraising exercise completed in July, said its manager on Friday (Nov 3).

Revenue for H1 FY2024 grew 4.4 per cent to S$86.8 million from S$83.2 million a year prior. This was driven by higher rental and recoveries from the real estate investment trust’s logistics, warehouse and industrial properties. This more than offset lower revenue from its Australia properties caused by the weakening of the Australian dollar.

Net property income (NPI) rose 5.1 per cent on the year to S$64.3 million from S$61.1 million, while NPI margin improved by half a percentage point to 74 per cent.

Distribution to unitholders grew 7.1 per cent to S$36.1 million across 810.1 million units, against distributions of S$33.7 million across 718 million units for H1 FY2023. The enlarged unit base was the result of an equity fundraising exercise comprising a S$70 million private placement and a S$30 million preferential offering.

George Wang, chairman of AA Reit’s manager, said the completion of these activities fortifies the Reit’s balance sheet by providing funding for near-term organic growth initiatives.

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It also provides the Reit with financial flexibility to capture opportunities amid an uncertain environment, he added.

Russell Ng, chief executive of the manager, said: “We remain confident in the defensiveness of our portfolio and see bright spots in our markets, where demand for logistics and high-spec industrial spaces, amid a tight supply situation, will continue to drive resilient returns.”

Over H1 FY2024, the Reit achieved a portfolio rental reversion rate of 37.7 per cent, with occupancy rising to 98.1 per cent as at end-September 2023, compared with 97.5 per cent in the same period last year.

Its aggregate leverage stood at 32.1 per cent with no debt refinancing until Q2 FY2025, and it has undrawn committed facilities and cash and bank balances of about S$188 million.

The manager noted that leasing activity within its Singapore market remains resilient as demand continues to outpace supply, with rents of most industrial properties remaining on an upward trend.

It expects infrastructure improvements in Macquarie Park and Norwest Business Park in Sydney, Australia, to support the Reit’s future growth.

Economic growth in Australia is however “likely to remain restrained” due to higher interest rates and cost-of-living pressures, cautioned the manager.

Units of AA Reit ended Thursday up S$0.03 or 2.5 per cent at S$1.25.