AIMS APAC REIT Reports Solid 3Q FY2025 Results with Strategic Growth Initiatives

AIMS APAC REIT (AA REIT) has announced its 3Q FY2025 business update, showcasing robust financial performance, strategic asset management, and sustainability initiatives. Investors should take note of the key developments, which could have a material impact on share value.

Key Financial Highlights

• Revenue: Up 5.7% year-on-year to S\$139.1 million.
• Net Property Income (NPI): Increased by 1.9% year-on-year to S\$99.6 million.
• Distributions to Unitholders: Rose by 4.3% to S\$57.5 million.
• Distribution Per Unit (DPU): Increased by 1.1% to 7.070 Singapore cents.

The growth in revenue and distributions was primarily supported by continued rental reversions in the logistics and industrial segments, despite higher property taxes and electricity costs.

Portfolio and Asset Management Updates

• Portfolio Occupancy: Declined slightly to 94.5% from 98.1% at the end of 2023 but is expected to rebound to 96.3% based on committed leases.
• Rental Reversions: Achieved a healthy 21.2% rental reversion for the first nine months of FY2025.
• Tenant Retention: Stands at 76.3%, reflecting steady demand for AA REIT’s properties.

AA REIT’s portfolio remains well-diversified across logistics, industrial, business parks, and hi-tech segments, with 54% of leases featuring built-in escalations. Notably, a significant portion of its tenants are anchored in defensive industries, contributing to stable and resilient income streams.

Ongoing Asset Enhancement Initiatives (AEIs)

Investors should closely monitor two major AEIs currently in progress:

• 7 Clementi Loop: Undergoing refurbishment to meet BCA GreenMark Gold Plus certification, with a secured 15-year master lease. The AEI is 50% complete and expected to yield over 7.0% NPI upon completion in 1Q FY2026.
• 15 Tai Seng Drive: Repositioning to attract high-value tenants, including a global precision engineering firm under a 10-year lease. The AEI is 20% complete and projected to generate over 7.0% NPI.

These projects are funded through the S\$100 million equity fundraise completed in FY2024, signaling AA REIT’s commitment to long-term value creation.

Sustainability Progress

AA REIT continues to focus on ESG initiatives, including:

• Installing rooftop solar panels with a capacity of 3.65 MWp.
• Rolling out smart metering systems across 15 properties in Singapore.
• Completing electric vehicle (EV) fast-charging stations at four properties.

These measures aim to reduce operating costs, future-proof assets, and attract ESG-conscious tenants.

Capital Management and Debt Profile

• Aggregate Leverage: Increased to 33.7% from 32.2% as of 31 December 2023, providing headroom for future growth.
• Weighted Average Debt Maturity: Extended to 3.2 years, with no more than one-third of debt maturing in any single financial year.
• Interest Rate Management: 70% of borrowings are on fixed rates, mitigating interest rate risks.

AA REIT’s proactive capital management strategy aligns its financing structure with sustainability goals, including a Sustainability-Linked Loan (SLL) that enhances financial flexibility.

Market Outlook

AA REIT remains optimistic about its core markets:

• Singapore: Supported by a 4.3% GDP growth in 4Q 2024, increasing demand for high-tech and logistics spaces is expected to sustain rental growth.
• Australia: Infrastructure developments, including the Sydney Metro extension and Brisbane 2032 Olympics, will bolster long-term demand for AA REIT’s assets.

Strategic Direction

AA REIT aims to deliver long-term value through:

• Selective investments in high-quality assets.
• Active asset management to ensure high occupancy and rental growth.
• Prudent capital management, including divestment of non-core assets and reinvestment into AEIs and quality properties.
• Leveraging strategic partnerships for larger projects.

With a curated portfolio of high-performing assets and a disciplined growth strategy, AA REIT is well-positioned for sustainable success.

Disclaimer

This article is for informational purposes only and does not constitute financial advice or an offer to buy or sell securities. Investors are advised to conduct their own research or consult a licensed financial advisor before making any investment decisions. Past performance is not indicative of future results.