The manager of AIMS APAC REIT (AA REIT) has reported distribution per unit (DPU) for the 3QFY2021 ended December of 2.05 cents, 18.0% lower than DPU of 2.50 cents declared a year ago.
This brings DPU for 9MFY2021 to 6.05 cents, 19.3% down from DPU of 7.50 cents in 9MFY2020.
3QFY2021 distributions to unitholders fell 17.6% y-o-y to $14.5 million, mainly due to the management fees that were fully paid in cash during the quarter. The lower figure was also attributable to the amount reserved for distribution to perpetual securities holders.
The manager says it has resolved to distribute some 95.6% of the Singapore taxable income available. Distributions during the quarter included taxable income from the REIT’s Singapore operations and capital distribution from its investment in Optus Centre in New South Wales and Boardriders Asia Pacific HQ in Gold Coast.
9MFY2021 distributions to unitholders fell 18.4% y-o-y to $42.8 million.
3QFY2021 gross revenue climbed 9.1% y-o-y to $32.1 million mainly due to the maiden rental contribution from 7 Bulim Street as well as higher rental and recoveries at 3 Tuas Avenue 2 and 20 Gul Way.
See: AIMS APAC REIT to acquire property in Jurong Innovation District for $129.6 mil
The increase was partly offset by lower contributions from 1A International Business Park due to the conversion from its master lease to multi-tenancy leases. It was also offset by the expiry of the master lease at 541 Yishun Industrial Park A and lower rental and recoveries from 103 Defu Lane 10.
Property operating expenses for the quarter increased 34.9% y-o-y to $8.6 million mainly due to a property tax refund of $2.3 million for 20 Gul Way that was recognised the year before. The refund was attributable to a change in the prior years’ annual value assessed by the Inland Revenue Authority of Singapore (IRAS).
Accordingly, net property income (NPI) inched up 2.0% y-o-y to $23.6 million mainly due to higher gross revenue, and offset by the higher property operating expenses during the period.
NPI margin for the 3QFY2021 fell 5.1 percentage points to 73.4% compared to the same period last year.
AA REIT’s share of profits of joint venture for the quarter plunged 92.7% y-o-y to $3.4 million mainly due to the share of revaluation surplus of $44.1 million recognised from the valuation of Optus Centre a year ago.
The REIT also registered a foreign exchange gain of $73,000 in 3QFY2021 compared to the $2,000 recognised a year ago.
9MFY2021 gross revenue dipped 0.8% y-o-y to $89.9 million due to the estimated additional rental relief for eligible tenants in Singapore, as well as lower contributions from 1A International Business Park and 541 Yishun Industrial Park A.
Property operating expenses for 9MFY2021 increased 19.2% y-o-y to $26.3 million mainly due to the property tax refund recognised a year ago and higher costs from the conversion of the master lease to multi-tenancy leases at 1A International Business Park.
As such, NPI for the 9MFY2021 fell 7.3% y-o-y to $63.5 million. NPI margin fell 4.9 percentage points to 70.7% for the 9MFY2021.
The REIT recognised a foreign exchange gain of $279,000 in the 9MFY2021 compared to the $80,000 loss in the 9MFY2020.
As at Dec 31, 2020, portfolio occupancy for AA REIT stood at 95.7%, above the industry average of 89.6%. This was backed by a long weighted average lease expiry (WALE) of 3.94 years.
For more stories about where the money flows, click here for our Capital section
Cash and cash equivalents as at end-December 2020 stood at $14.8 million, lower than the $21.8 million posted a year ago.
Earnings per unit (EPU) on a diluted basis stood at 1.26 cents for the 3QFY2021 compared to the 7.73 cents in 3QFY2020.
9MFY2021 EPU stood at 2.09 cents, compared to the 10.69 cents a year ago.
Looking ahead, the REIT expects a positive overall industrial outlook for both Singapore and Australia as it continues to be supported by the shifts in consumer behaviour towards e-commerce. Increased business activities in the advanced manufacturing and information and communications technology (ICT) industries are also expected to contribute to the positive outlook.
“The REIT has continued to maintain a stable performance, underpinned by the portfolio’s diversity in tenant and asset mix, with over 50% in the resilient logistics and warehouse sector,” says Koh Wee Lih, CEO of the manager.
“With a gradual global economic recovery from the Covid-19 pandemic expected in 2021, backed by concerted vaccination campaigns and government support worldwide, we remain steadfast in our focus on proactive lease management, tenant retention, maintaining a healthy balance sheet and prudent financial discipline. We are pleased to note that the REIT’s focus on proactive leasing efforts has translated into the completion of 21 leasing deals during the quarter, with above-industry portfolio occupancy rate at 95.7%,” he adds.
Unitholders can expect to receive their distribution on March 19.
Units in AA REIT closed 1 cent lower or 0.8% down at $1.29 on Jan 27.
See also: AIMS APAC REIT to acquire Sime Darby Business Centre for $102 mil
