AIMS Apac Real Estate Investment Trust : O5RU +0.73%&rsquo s (Reit) manager has appointed Vivienne Yu as non-executive independent director with effect from Feb 1, it announced on Wednesday (Feb 1).

 

The announcement was made on the same day and the manager said Yu will also join the audit, risk and compliance committee, as well as the nominating and remuneration committee as a member.

 

The incoming independent director is currently the executive director of financial services company KVB Global Markets Australia. She is also the non-executive director in several organisations in Australia, including the Australia China Business Council New South Wales, National Foundation for Australian Women and Bridge Housing. 

 

Yu has more than 20 years of experience in leadership and management roles within the banking and financial services sector in Australia and Asia, the Reit manager said. 

 

She was previously the China chief executive and executive general manager of Commonwealth Bank of Australia, and temporarily the deputy chief executive of Bank of Hangzhou. 

 

&ldquo (Yu&rsquo s) proven leadership abilities, extensive experience in investments, banking and finance and strong credentials in China and Australia, will provide the board and management with invaluable commercial and governance perspectives,&rdquo said the manager&rsquo s chairman George Wang. 

 

Aims Apac Reit reported higher H1 FY2023 gross revenue and net property income. This was supported by the acquisition of Australian supermarket and grocery chain Woolworths&rsquo headquarters, and higher rental income and recoveries from the Singapore portfolio. 

 

IN the recent bi-annual macroeconomic review published by the Monetary Authority of Singapore (MAS), outlook for Singapore&rsquo s 2022 full-year gross domestic product (GDP) growth was kept unchanged at 3 to 4 per cent with broad-based contributions from the trade-related, domestic-oriented, travel-related and modern services clusters.

 

However, MAS noted that Singapore&rsquo s economic growth is expected to slow to a pace that is below trend next year, weighed down by key external-facing sectors such as manufacturing and financial services.

 

All eight of Singapore&rsquo s industrial S-Reits have reported their respective Q3 financial results or business updates. Average portfolio occupancy rate across the eight S-Reits was held steady at 95.4 per cent while average gearing ratio was at 37.2 per cent.

 

In their releases, many echoed the weakening global outlook provided by MAS, citing challenges such as inflation, geopolitical tension and rising energy costs. However, several also noted the resilience of the industrial segment in Singapore, underpinned by long-term demand for logistics, high-value manufacturing and biomedical sectors.

 

Four out of the eight industrial S-Reits published financial results for the latest quarter &ndash Aims Apac Reit : O5RU +3.28%, EC World Reit : BWCU +3.41%, Mapletree Industrial Trust : ME8U +5.5% and Mapletree Logistics Trust : M44U +6.62% &ndash while the rest reported interim business updates.

 

Aims Apac Reit (AA Reit) reported that H1 FY2023 gross revenue and net property income (NPI) rose 27.5 per cent and 28.2 per cent year on year (yoy) respectively. This was supported by the acquisition of Australian supermarket and grocery chain Woolworths&rsquo headquarters, as well as higher rental income and recoveries from the Singapore portfolio. However, distribution per unit (DPU) for the period dipped 1.1 per cent amid an enlarged unit base. AA Reit also noted strong leasing momentum with the execution of 47 leases representing 6.7 per cent of total portfolio net lettable area (NLA) at positive rental reversion of 8.1 per cent.

 

EC World Reit (ECWReit) noted that Q3 FY2022 results were consistent with improving stability in China during the quarter, albeit recording a 5.4 per cent yoy dip in NPI attributable to depreciation of the renminbi and higher property expenses. In October, ECWReit proposed the divestment of Beigang and Chongxian Port Logistics. The manager commented that this divestment is timely and will allow the Reit to realise value due to the premium on agreed property values, enable it to pare down debts and provide a special distribution to unitholders.

 

Mapletree Industrial Trust (MIT) reported that gross revenue and NPI for Q2 FY22/23 grew 12.8 per cent and 8.3 per cent yoy to S$175.5 million and S$130.3 million respectively. The improved performance is largely contributed by the acquisition of 29 data centres in the US, partially offset by higher property operating expenses and borrowing costs.

 

MIT will begin the release of S$6.6 million of income in Q3 FY22/23 over three quarters. This is related to distributions declared by joint ventures that had been withheld in Q4 FY19/20 to provide MIT greater flexibility in cash management during the pandemic.

 

Mapletree Logistics Trust (MLT) reported that Q2 FY22/23 gross revenue and NPI increased 11.4 per cent and 10.8 per cent yoy respectively. Amount distributable to unitholders grew 15.6 per cent as the impact of weakening currencies is mitigated through the use of foreign currency forward contracts to hedge income from overseas assets.

 

During the period, MLT achieved a positive average rental reversion of approximately 3.5 per cent, contributed by renewal or replacement leases from across almost all of MLT&rsquo s markets.

 

THE manager of Aims Apac : O5RU +6.03% real estate investment trust (AA Reit) has announced a distribution per unit (DPU) of S$0.047 for the first half of FY2023 ended Sep 30, marginally down from its DPU of S$0.0475 in the corresponding period a year ago. 

 

The DPU for H1 FY2023 held steady amid an enlarged unit base, a 27.5 per cent increase in gross revenue to S$83.2 million and a 28.2 per cent rise in net property income (NPI) to S$61.1 million. 

 

The rise in revenue and NPI were largely due to its acquisition of Australian supermarket and grocery chain Woolworths&rsquo headquarters, as well as rental incomes and recoveries from its Singapore properties, the manager said.

 

Meanwhile, the amount distributable to unitholders inched up 0.4 per cent to S$33.7 million in H1 FY2023, from S$33.6 million in the same period last year. 

 

Excluding the Reit&rsquo s one-off reversal of rental relief provision during the pandemic, its manager said that DPU would have gone up 0.9 per cent from the adjusted DPU of S$0.0466, while the amount distributable to unitholders would have hiked 2.3 per cent. 

 

Overall growth was moderated by higher borrowing costs, especially to finance the acquisition of Woolworths&rsquo headquarters the depreciation of the Australian dollar against the Singapore dollar and an increase in the amount reserved for distribution to perpetual securities holders, said AA Reit&rsquo s manager. Its property operating expenses also surged 25.8 per cent on the year to S$22.1 million from S$17.5 million, offsetting potential gains. 

 

In an earnings call with The Business Times (BT), chief executive of the Reit&rsquo s manager, Russell Ng, said he intends to capitalise on a combinaton of fixed built-in escalation and rental reversions to help AA Reit improve its overall revenue projection.

 

Elaborating, he said that at least 50 per cent of AA Reit&rsquo s revenue is currently covered by built-in escalations averaging 3 per cent a year to combat inflation, and he intends to grow the pie of rental income covered by such a mechanism.

 

Rental reversions, he said, can be achieved through its multi-tenanted segment, which currently contributes 55.2 per cent of gross rental income.

 

&ldquo We like that combination between multi-tenancy and single user, because the other thing about multi-tenancy &ndash when you have shorter leases, it allows you to go back to the market and have a renewal of our leases to market, so we have a mark to market,&rdquo he said.

 

Ng added that AA Reit has managed to see a sustained rental uplift, particularly within the logistics and warehouse segment, amid a tightening supply of good quality buildings.

 

The manager, meanwhile, said Australia&rsquo s industrial sector remains supported by infrastructure investment, supply chain volatility and higher online spending. 

 

The Reit&rsquo s two business parks (Optus Centre and Woolworths&rsquo headquarters in Sydney) and one light industrial asset (Boardriders&rsquo headquarters in Gold Coast) are on triple-net leases with long lease terms ranging from 9 to 11 years, it pointed out.

 

Going forward, the manager added it intends to implement energy-efficient measures to alleviate rising energy costs and inflationary pressures, which are expected to add to operational expenses.

 

Ng told The Business Times that AA Reit is interested in the growing sustainability-linked loans market, but, given that its average loan maturity is about 3.5 years &ndash which he calls &ldquo fantastic&rdquo under current market conditions &ndash it may not be commercially viable to unravel its existing loans.

 

Nevertheless, he said the Reit&rsquo s manager is in &ldquo active discussions&rdquo with a couple of lenders on the possibility of converting their existing loans to green ones, since the Reit is working on concretely reducing its carbon emissions, which would qualify it for the green loans.