AIMS APAC REIT (SGX:O5RU)’s 1QFY25 results were in-line with our expectations. Gross revenue and net property income (NPI) rose 9.7% and 6.6% y-o-y ( y-o-y) to S$47.3m and S$34.4m, respectively. This was driven by rental growth across their logistics and warehouse segment where AIMS APAC REIT achieved another robust rental reversion of 12.8% for the quarter.
1QFY25 DPU met expectations
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Slight dip in portfolio occupancy and increased cost of debt
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The only risk identified is the non-renewal of the lease by their 8th largest tenant, DHL, which contributes 2.3% of gross rental income (GRI). However, one-third of the lease has been signed, advanced negotiations are underway for another third, and the lease for the final third expires in January 2025, allowing time for backfilling.
Aggregate leverage increased from 32.9% to 33.1%, and the cost of debt rose from 4.1% to 4.3%. AIMS APAC REIT's cost of debt remained stable on a q-o-q basis, as the previous cost of debt of 4.1% was a blended rate for the entire FY24.
In FY25, AIMS APAC REIT has a fixed debt of S$100m at 3.6% that needs refinancing in Nov 2024. If refinanced now, it would cost approximately 4%- 4.5%, which would raise the average cost of debt for the REIT.
Greater clarity on growth initiatives and going greener –
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Above is an excerpt from a report by OCBC Investment Research. Clients of OCBC Securities may be the first to access the full PDF report @ https://www.iocbc.com/.
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