The sale price is a 32.5% premium to the property&rsquo s valuation as at Mar 31, 2024

 

AIMS Apac Real Estate Investment Trust : O5RU +0.8% (AA Reit) is divesting a warehouse at 3 Toh Tuck Link in Singapore for S$24.4 million.

 

The sale price represents a 32.5 per cent premium to the property&rsquo s valuation of S$18.4 million as at Mar 31, 2024, the Reit manager said in a bourse filing on Tuesday (Dec 10) evening.

 

The buyer is Hong Kong-headquartered multinational logistics company Crown Worldwide. Subject to JTC Corporation&rsquo s approval, the divestment is set to complete by the first half of next year.

 

Net proceeds from the divestment may be re-invested to support AA Reit&rsquo s various growth initiatives, including potential new acquisitions, asset enhancement initiatives or future redevelopment projects, said Russell Ng, chief executive officer of the manager.

 

&ldquo This aligns with our proactive asset management strategy and our continuous effort towards portfolio rejuvenation, ultimately strengthening AA Reit&rsquo s resiliency as well as delivering long-term sustainable returns for our unitholders,&rdquo he added.

 

The warehouse located in the Toh Tuck Industrial Estate is in part a three-storey factory and a five-storey ancillary office building with a total gross floor area of 12,492.4 square metres.

 

Following the divestment, AA Reit&rsquo s portfolio will comprise 27 properties across Singapore and Australia.

 

This is despite an enlarged unit base following an equity fundraising exercise completed in H1 FY2024

 

AIMS Apac Reit : O5RU +0.79%&rsquo s (AA Reit) distribution per unit (DPU) for the first half ended September rose 0.4 per cent to S$0.0467, from its H1 FY2024 DPU of S$0.0465.

 

The overall improvement in DPU comes despite an enlarged unit base following an equity fundraising exercise completed in H1 FY2024, said its manager on Tuesday (Nov 5).

 

Revenue for H1 FY2025 grew 7.7 per cent to S$93.5 million from S$86.8 million a year prior. Net property income (NPI) rose 5.1 per cent on the year to S$67.6 million.

 

Distributions to unitholders were up 5 per cent at S$38 million across 813.6 million units, against distributions of S$36.1 million across 810.1 million units for H1 FY2024.

 

The increase in revenue, NPI and distributions were attributed to rental growth across AA Reit&rsquo s logistics and warehouse, and industrial segments, as well as strong rental reversions.

 

Over H1 FY2025, the real estate investment trust (Reit) achieved a portfolio rental reversion rate of 16.9 per cent. Its occupancy stood at 95 per cent as at end-September 2024, compared with 98.1 per cent in the same period last year.

 

Excluding the impact of asset enhancement initiatives (AEIs) and transitory movement by tenants, portfolio occupancy rate would have been 96.7 per cent.

 

Currently, AEIs are being undertaken at two of the Reit&rsquo s industrial assets &ndash 7 Clementi Loop and 15 Tai Seng Drive. The initiatives include roofing works, structural and external facade works, as well as upgrading of internal common areas and amenities.

 

Both AEIs are expected to be completed in the first quarter of FY2026. They are projected to yield more than 7 per cent in NPI.

 

Russell Ng, chief executive of AA Reit&rsquo s manager, said the initiatives help the Reit develop a &ldquo high-quality portfolio that drives consistent DPU growth and overall distributions to unitholders&rdquo .

 

George Wang, chairman of AA Reit&rsquo s manager, said: &ldquo Backed by our robust balance sheet, we are well-positioned to grow unitholders&rsquo value through strategic investments that deliver risk-adjusted returns and sustainable long-term income.&rdquo

 

He is also confident that the Reit will continue to grow amid an improving macroeconomic environment.

 

As at Sep 30, 2024, the Reit&rsquo s aggregate leverage stood at 33.4 per cent with no refinancing risk for the next 12 months, and it has undrawn committed facilities and cash and bank balances of about S$305.9 million.

 

Looking ahead, the manager believes that demand for industrial space in Singapore will continue to rise as international firms expand into the Republic.

 

&ldquo Transaction volume of multiple-user factory spaces and warehouses looks to gain momentum,&rdquo it said.

 

For its assets in Australia, the manager believes growth will be underpinned by strong tenant covenants on long lease terms, and built-in rental escalations from long-term government infrastructure investments.

Just in time for Christmas.  7.5% dividend rate at current price.
Much better than T-bill or SSB for long term shareholder. Toast to those who invested !

Ex Date:    13/11/2024

Pay Date: 24/12/2024