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AIMS AMP Capital Industrial REIT’s (AA REIT) distribution per unit (DPU) for the fourth quarter ended 31 March 2017 increased 0.4 percent quarter-on-quarter to 2.78 Singapore cents, bringing total DPU for FY 2017 to 11.05 Singapore cents.
Gross revenue rose 0.8 percent to S$30.6 million in Q4 2017 from S$30.4 million in Q3 2017, while net property income climbed 0.9 percent to S$19.97 million from S$19.79 million.
The trust attributed the increase to the “maiden contribution from the newly completed property at 30 Tuas West Road from 27 February 2017”.
“While there is continued headwinds across the industry with rents under pressure from the oversupply situation in the Singapore industrial market, data from the first quarter of 2017 is reflecting early signs of recovery and providing some optimism,” said Koh Wee Lih, chief executive officer of the trust’s manager.
Notably, the manager executed 27 new and renewal leases in Q4 2017, keeping portfolio occupancy healthy at 94.6 percent, up from the 89.5 percent industry average.
“We’re rounding up FY2017 with a strong capital structure because of our prudent approach to capital and risk management. 84.4 percent of our interest rates are now fixed with the recent issuance of a S$50 million 5-year fixed rate notes. Furthermore, in April, we’ve received commitment from our lenders to refinance the existing secured facility due in November 2017. Post this refinancing, the weighted average debt maturity will increase to 2.7 years (on a proforma basis) from 2.3 years,” added Koh.
Looking ahead, AA REIT expects rent to remain under pressure, given the industrial oversupply situation in Singapore and the uncertain geopolitical and macroeconomic outlook.
With this, the trust will “continue to remain focused on managing risks through prudent capital management and to optimise the portfolio through sector and tenant diversification across its portfolio of 27 properties”.
To date, the trust has two ongoing development projects – greenfield development at Marsiling and 8 & 10 Tuas Avenue 20 – that are slated for completion in 2H 2017.
This article was edited by Denise Djong.
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