AIMS APAC REIT (AA REIT) O5RU has reported a distribution per unit (DPU) of 5.244 cents for the 2HFY2023 ended March 31, 11.3% higher y-o-y.
This brings its FY2023 DPU to 9.944 cents, 5.1% higher y-o-y.
The higher DPUs were attributable to the higher gross revenue and net property income (NPI) for both periods. They were also partly offset by the full-year impact in the amount reserved for distribution to the REIT’s perpetual securities holders, higher borrowing costs and other trust expenses.
In the 2HFY2023, gross revenue increased by 9.1% y-o-y to $84.2 million as the REIT saw contribution from the acquisition of Woolworths HQ for the full half-year period. Woolworths HQ was acquired in November 2021. The higher rental and recoveries from AA REIT’s logistics and warehouse, as well as hi-tech and industrial properties also contributed to the higher gross revenue.
Net property income (NPI) for the half-year period rose by 10.6% y-o-y to $61.4 million mainly due to the higher gross revenue.
2HFY2023 distributions to unitholders increased by 12.7% y-o-y to $37.9 million.
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In the FY2023, gross revenue rose by 17.6% y-o-y to $167.4 million largely due to the full-year contribution from Woolworths HQ, as well as higher rental and recoveries from the REIT’s logistics and warehouse as well as hi-tech and industrial properties.
FY2023 NPI increased by 18.7% y-o-y to $122.5 million due to the higher revenue.
Distributions to unitholders for the full year increased by 6.5% y-o-y to $71.6 million.
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As at March 31, the REIT’s portfolio occupancy stood at a record high of 98.0%, 0.4 percentage points higher y-o-y. Its weighted average lease to expiry (WALE) stood at 4.4 years, down from 5.0 years in the year before.
Rental reversion stood at a positive 18.5% compared to FY2022’s 7.4%.
In FY2023, the REIT executed 38 new and 56 renewal leases, representing 156,176 sqm or 19.9% of the portfolio’s total net lettable area (NLA).
The REIT’s aggregate leverage ratio as at March 31, stood at 36.1%, 1.4 percentage points lower y-o-y. Its borrowings on fixed rates stood at 88%, down from the 92% in the same period the year before.
Cash and cash equivalents as at March 31 stood at $13.2 million.
“We are pleased to report a strong set of financial and operational results for FY2023, including a record occupancy rate and double-digit rental growth driven by our active asset and lease management teams and sustained demand for modern and ramp up logistics and warehouse facilities, which represents over 42% of our portfolio,” says Russell Ng, CEO of the manager.
“We ended the year with a strong balance sheet on the back of a proactive capital management approach which has also allowed us to mitigate the volatility in interest rates and positioned us well for the future,” he adds.
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Looking ahead, Ng remains positive on the REIT as its markets remain attractive and will “continue to offer abundant growth opportunities despite market headwinds”.
“We are actively reviewing opportunities within our portfolio to drive organic growth, which includes adding value through active lease management to secure higher contracted rents, to underpin our future earnings. The divestment of our non-core asset at 541 Yishun Industrial Park A, planned asset enhancement initiatives and potential redevelopments will continue to strengthen our portfolio quality and enhance long-term total returns for unitholders. We are confident on building on our proven strategy of disciplined capital allocation and operational excellence,” he says.
George Wang, chairman of the manager, notes that the REIT’s “financial resilience and sustainable growth” was attributable to its “disciplined enhancement and selection of strong foundational assets”.
“The quality of our portfolio has underpinned our robust performance throughout the Covid-19 pandemic and this period of rapid interest rate hikes, and I am very pleased to see our FY2023 DPU increase by 5.1%, following FY2022 DPU increase of 5.7%,” he says.
He adds: “Our strong foundation will prepare us for further growth and enable us to drive returns and value for our unitholders across the various economic cycles. We remain prudent and disciplined in our risk and capital management approach. This will enable us to capture opportunities in challenging market environments and deliver long term sustainable returns for unitholders.”
As at March 31, AA REIT owns 29 properties valued at $2.2 billion.
Unitholders will receive their DPUs on June 28.
Units in AA REIT closed 3 cents higher or 2.21% up at $1.39 on May 4.
