AIMS APAC REIT - RHB Invest 2024-01-09: Renewal Of Master Leases; BUY

• AIMS APAC REIT (SGX:O5RU)’s renewal of two of its Singapore master leases is a positive. Its Singapore logistics assets still enjoy healthy double-digit rental reversions amid favourable demand-supply dynamics, while there is income stability from long-lease assets in Australia with annual rental rate hike clauses built in.
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• Valuations remain attractive – AIMS APAC REIT's share price is trading slightly below book value.

Renewal of KWE and Aalst Chocolate master leases for five and ten years respectively.

• KWE – a subsidiary of Kintetsu World Express, a major Japanese freight forwarding and logistics group – is AIMS APAC REIT’s fourth largest tenant, accounting for ~6% of 1HFY24 income. This tenant has been occupying the 7 Bulim Street asset since 2014 (this asset was acquired by the REIT in Oct 2020). The new lease will extend until Dec 2028, with positive rental reversions expected to be from the high single digits to mid-teens and added rental rate escalations.
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Overall weighted average lease expiry (WALE) increase to 4.6 years

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Vijay Natarajan RHB Securities Research | https://www.rhbgroup.com/ 2024-01-09 SGinvestors.io

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