AIMS AMP Capital Industrial real estate investment trust (AA Reit) said that five of its assets valued at S$283.6 million at end-September have been legally freed from serving as bank security.
Together with the previous eight assets freed from encumbrance last year, the total value of assets not tied to bank loans formed S$527.2 million or 42.9 per cent of the current total appraised value of the Singapore portfolio of S$1.23 billion at end-Sept.
Koh Wee Lih, CEO of the Reit manager, said that the release from encumbrance "reflects our banking syndicate's confidence in the trust's solid financial position".
AA Reit's interest coverage ratio of its last reported quarter, a measure of how well interest payments are covered by earnings, was a "healthy 4.2 times, well about our bank covenant of 2.5 times", he said.
"The trust is in a strong financial position, with growing cashflows, high occupancy and an attractive development pipeline. Releasing these assets provides further financial flexibility and strengthens the balance sheet," he said.
The Reit's leverage ratio, or debt to total assets, was 32 per cent at end-Sept.
AA Reit closed unchanged at S$1.44 on Tuesday.