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AIMS AMP Capital Industrial REIT (AA REIT) posted a 2.8 percent drop in distribution per unit (DPU) to 2.77 cents for its third quarter ended 31 December 2016, from 2.85 cents during the previous year.
Distribution to unitholders slipped 2.3 percent to $17.7 million, from $18.1 million a year ago.
Gross revenue fell 6.7 percent to $30.4 million, “mainly due to lower rental contributions for the properties at 27 Penjuru Lane, 8 &10 Pandan Crescent, as well as the loss in revenue due to the redevelopment of 8 & 10 Tuas Avenue 20”.
“This was partially offset by higher rental and recoveries for the property at 29 Woodlands Industrial Park E1,” said the trust manager.
Net property income also declined six percent to $19.8 million, given the trust’s higher property expenses to maintain properties and lower gross revenue.
The trust manager revealed that 19 new and renewal leases were executed during the period, which represent 82,149.3 sq m (13.1 percent) of net lettable area.
“The results reflect the steady progress of AA REIT in executing on its strategy of active and prudent management of its assets, leases and capital,” said Koh Wee Lih, CEO of the trust manager.
“As a result of our focus on long-term tenant relationships and prioritising tenant retention, our portfolio occupancy is at 94 percent, and we continue to be above the industry average of 89.5 percent,” he noted.
Looking ahead, the trust manager expects rentals to continue to be under pressure “given the uncertain macroeconomic and geopolitical outlook and the industrial oversupply situation in Singapore”.
With this, AA REIT will “continue to remain focused on managing risks through prudent capital management and diversification across its portfolio of 27 properties”, it said.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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