- AIMS APAC REIT reported 1QFY26 DPU of S$2.28 cents, -9.9% q-o-q/+0.4% y-o-y.
- Operating metrics were steady: reversion slowed to positive mid-single digit in line with guidance while occupancy was stable. Debt metrics were stable with low gearing excluding perps. AEIs are on track.
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Steady quarter.
- 1Q revenue of S$47.4m rose 0.2% y-o-y. But NPI of S$34.1m fell 1.0% y-o-y to S$34.1m, mainly due to temporary vacancy arising from the ongoing AEI at 7 Clementi Loop.
- Overall portfolio occupancy was 93.7% (4Q 93.6%). Excluding the ongoing impact from the AEIs and transitory movements by tenants, the portfolio occupancy rate based on committed leases would be 96.5%.
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Proactive capital and asset management.
- Gearing remains low at 28.9% and cost of debt stable at 4.3%. AIMS APAC REIT successfully issued S$125m of perp at 4.7% coupon to redeem existing perp with coupon of 5.65%. Another outstanding perp has a coupon rate of 5.375%.
- With blended debt cost below perp coupon rates and likely to fall further with falling S$ and AUD base rates, we see scope to lower all-in financing cost and lift distribution to unitholders.
- AEIs are on track. 3 Toh Tuck Link was divested at 32.5% premium to book and used to repay debt.
Maintain HOLD.
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