AIMS APAC REIT - OCBC Investment 2024-07-31: Stable Results With Prudent Growth Strategies

• 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

• - Read this at SGinvestors.io -

Slight dip in portfolio occupancy and increased cost of debt

• - Read this at SGinvestors.io -
• 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 –

• Read more at SGinvestors.io.

Donavan Tan OCBC Investment Research | https://www.iocbc.com/ 2024-07-31 SGinvestors.io

---