AIMS APAC REIT - Stable DPU as portfolio remains robust

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REITs

By Gerald Wong, CFA • 01 Aug 2025

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AIMS APAC REIT (AAREIT) reported 1QFY26 DPU of 2.28 cents, up 0.4% year-on-year.

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Stable DPU in 1QFY26

AIMS APAC REIT (AAREIT) reported 1QFY26 DPU of 2.28 cents, up 0.4% year-on-year.

While distributions to unitholders rose 1.1% year-on-year, an enlarged unit base meant DPU only rose by 0.4% year-on-year.

Revenue increased by 0.2% year-on-year while Net Property Income (NPI) fell by 1.0% year-on-year, due to higher property expenses.

Positive rental reversions of 5.4%

AAREIT achieved positive rental reversion of 5.4% in 1QFY26, led by the logistics and warehouse segment which recorded rental reversion of 7.3%.

During the quarter, AAREIT executed 7 new and 25 renewal leases, totalling 67,941 sqm, representing 8.8% of the portfolio’s net lettable area (NLA).

With proactive asset management efforts, AAREIT achieved 59.3% in tenant retention, on a 12-month rolling basis.

Portfolio maintained robust performance

As of 30 June 2025, portfolio occupancy was 93.7%, compared with 97.3% as of 30 June 2024.

The key reasons were the ongoing Asset Enhancement Initiatives (AEIs) and tenants in transition.

Excluding these factors, the portfolio occupancy rate remains healthy at 96.5% and management expects occupancy to be stable.

Weighted average lease expiry (WALE) was at 4.4 years as of 30 June 2025.

AEIs on track for completion

Asset Enhancement Initiative (AEI) at 7 Clementi Loop was completed during the quarter and ready for fit-out.

AEI at 15 Tai Seng Drive is expected to complete in 2QFY26. Both assets are expected to achieve projected NPI yield post-AEI works of above 7.0%.

The divestment of 3 Toh Tuck Link was completed on 17 June 2025, with net proceeds expected to be used for debt repayment and fund new growth opportunities.

Aggregate leverage stable

AAREIT reported aggregate leverage at 28.9% as of 30 June 2025, unchanged from previous quarter.

Weighted average debt maturity is at 2.7 years, compared with 3.0 years as of end-March 2025. Blended debt funding cost was at 4.3%, unchanged from the previous quarter.

84% of debt is on fixed rates with an average fixed debt tenure of approximately 1.1 years.

AAREIT maintains strong financial flexibility with undrawn committed and cash-on-hand of approximately $312 million.

AAREIT does not have any refinancing requirement in the current financial year. Looking forward, management expects lower cost of debt amid the declining interest rate environment.

As AAREIT plans to redeem the perpetual security that is callable in August 2025 with funding from bank loans, the aggregate leverage is expected to increase marginally in 2QFY26.

Maintain BUY

We like AAREIT as it stands out in the sector in active asset rejuvenation, which helps to raise the value of its Singapore assets.

Besides the electronics and semiconductor components sectors, AAREIT is also seeing active expansion by companies in the Life Science and Pharmaceutical sector.

Based on AAREIT’s 1QFY26 DPU, AAREIT currently trades at 6.5% annualised DPU yield.

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