AIMS APAC REIT - Stable DPU with positive rental reversions

Stable DPU in 1HFY26

AIMS APAC REIT (AAREIT) reported 1HFY26 Distributable Income which increased 1.6% YoY to S$38.6 million, supporting a Distribution per Unit (DPU) of 4.72 cents, an improvement of 1.1% YoY. 

Gross Revenue rose 0.2% year-on-year (YoY) to S$93.7 million, while Net Property Income (NPI) grew 1.1% YoY to S$68.4 million, driven by positive rental reversions and sustained occupancy levels across its logistics and business park assets.

Positive rental reversions of 7.7%

During the period, the REIT executed 47 leasing transactions, comprising 11 new leases and 36 renewals, covering approximately 97,175 sqm, equivalent to 12.6% of total net lettable area (NLA). 

Overall rental reversions averaged +7.7%, with stronger gains seen in logistics & warehouse assets (+10.3%) and industrial assets (+2.9%).

Portfolio maintained robust performance

AAREIT maintained a portfolio occupancy rate of 93.3%, outperforming the JTC national industrial average of 89.1%, though declined from 93.7% in Jun-25 quarter. 

Excluding temporary tenant transitions, occupancy would have reached 95.1%. 

The Weighted Average Lease Expiry (WALE) remained steady at 4.2 years, supported by 188 tenants across resilient industries.

Extracting value through Asset Enhancement Initiatives

AAREIT continues to enhance portfolio value through active asset management and targeted redevelopment projects. 

At 15 Tai Seng Drive, the property was repositioned to attract high-tech and advanced manufacturing tenants, securing a ten-year anchor lease with a Temasek-linked precision engineering group and achieving a post-NPI yield of over 7 percent. 

Meanwhile, 7 Clementi Loop underwent a major refurbishment to meet BCA Green Mark Gold Plus standards and was leased to an NYSE-listed global storage and information management firm under a fifteen-year master lease.

Prudent capital management

AAREIT maintains a robust balance sheet with aggregate leverage of 35.0% and S$169.7 million of available cash and committed facilities. 

The REIT has no refinancing obligations until FY2027, reflecting its proactive debt management approach. 

The weighted average debt maturity stood at 2.5 years, while interest coverage ratio (ICR) was 2.5x (or 4.5x excluding perpetuals). 

The average cost of debt improved to 4.2%, with 70% of borrowings hedged at fixed rates. 

Additionally, 75% of forecasted AUD income is hedged into SGD on a four-quarter rolling basis, ensuring stability of distributions despite currency fluctuations.

Maintain BUY

Based on AAREIT’s 1HFY26 DPU, AAREIT currently trades at 6.8% annualised DPU yield. 

We raise our target price to S$1.50 from S$1.43, incorporating contributions from the Framework Building acquisition, which is expected to complete by late November 2025. 

Lower borrowing costs in Singapore are expected to provide additional tailwinds for AAREIT, supporting DPU upside into FY2026–FY2027. 

Related links:

• AIMS APAC REIT share price and share price target
• AIMS APAC REIT dividend history and forecast

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