AIMS APAC REIT: Steady DPU growth and strategic portfolio progress

Steady FY2026 DPU growth to 9.85 Singapore cents 

For the full year FY2026, gross revenue rose 2.2% year-on-year to S$190.7 million, while net property income (NPI) grew a stronger 5.7% year-on-year to S$141.3 million.   

AIMS APAC REIT declared a distribution of 2.60 Singapore cents per unit for the period from 1 January 2026 to 31 March 2026, bringing full-year FY2026 DPU to 9.85 Singapore cents — a 2.6% increase year-on-year.

Management attributed the better NPI performance to higher rental reversion and lower property expenses, primarily driven by cost efficiencies achieved during the period.

Notably, AIMS APAC REIT has launched the Distribution Reinvestment Plan (DRP) to the 4Q FY2026 distribution, with new units to be issued at approximately a 2.5% discount to the volume-weighted average price over the 10 market days preceding the record date.  At an estimated issue unit price of S$1.42, the FY2026 distribution yield stands at approximately 6.9%.

DRP is designed to strengthen the balance sheet and enhance financial flexibility while allowing unitholders to compound their holdings. 

Resilient financial performance

As at 31 March 2026, total portfolio valuation was S$125.8 million, an increase of 5.9% year-on-year.  The increase was driven by higher valuations for Singapore assets, AUD appreciation against SGD, and the acquisition of 2 Aljunied Avenue 1 in November 2025.  Net asset value per unit was higher accordingly, at S$1.28, +4.1% year-on-year. 

FY2026 gross revenue grew 2.2% year-on-year to S$190.7 million, supported by higher rental income across the logistics, warehouse and industrial segments. 

The increase was driven by properties including 27 Penjuru Lane, 8 & 10 Pandan Crescent and 61 Yishun Industrial Park A, along with higher income from 7 Clementi Loop following the completion of asset enhancement initiatives (AEI). 

In addition, AIMS APAC REIT received rental contributions from the newly acquired 2 Aljunied Avenue 1, which was completed on 20 November 2025. These gains were partially offset by the loss of revenue from the divestment of 3 Toh Tuck Link.

Net property income (NPI) grew a stronger 5.7% year-on-year to S$141.3 million, as the revenue growth was complemented by lower property operating expenses — specifically, a significant reduction in electricity costs. 

This resulted in NPI margin expanding to 74.1% in FY2026 (FY2025: 71.7%). The positive operating leverage underscores the quality and resilience of AIMS APAC REIT's portfolio.

Disciplined capital management

As at 31 March 2026, aggregate leverage improved to 26.8%, from 36.6%  as at 31 December 2025.  During 4Q FY2026, AIMS APAC REIT issued S$250 million in new perpetual securities to redeem higher-cost debt.  As a result, the blended debt funding cost reduced to 4.1% in FY2026, from 4.3% in FY2025.

AIMS APAC REIT issued two tranches of subordinated perpetual securities in 4Q FY2026 — S$150 million at 4.10% per annum (January 2026) and S$100 million at 4.25% per annum (March 2026). Net proceeds from these issuances will be used to redeem the S$250 million, 5.375% perpetual securities due for reset in September 2026, significantly lowering the cost of capital.  

Weighted average debt maturity was 2.2 years. The REIT has no debt maturities until FY2027, and active refinancing discussions for FY2027 debt are already underway with both existing and new lenders.  

Financial flexibility remains supported by undrawn committed facilities and bank balances of approximately S$263.4 million. Interest coverage ratio improved to 2.7x in 4Q FY2026, 2.6x in 3Q FY2026. 

As at 31 March 2026, 80% of borrowings were on fixed rates, significantly higher than 65% reported as at 31 December 2025.  AIMS  APAC REIT also hedges 69% of expected AUD distributable income into SGD on a rolling four-quarter basis to reduce FX volatility. 

Positive portfolio leasing momentum, rental reversions

Rental reversions moderated sequentially from the very strong +20.0% delivered in FY2025 to a still-healthy +7.7% in FY2026 — consistent with normalisation after peak cycle reversions. 

Logistics & Warehouse remained the standout performer at +9.8% for the full year, reflecting ongoing structural demand for modern logistics space. 

Hi-Tech achieved +11.7% for the year, albeit from a single lease renewal. 98.2% of single-user leases carry built-in annual rental escalations of 2.0–3.25% per annum, providing a floor on income growth.

Portfolio remained resilient in FY2026, with portfolio committed occupancy at 96.8%, substantially outperforming the JTC national average of 88.9%. 

The weighted average lease expiry (WALE) stood at 4.0 years, with over 50% of leases expiring beyond FY2030, providing strong income visibility.  Lease risk is more back-ended, with ~48.4% expiring in FY2030 and beyond. 

WALE is longest in Business Park (6.0 years) and Hi-Tech (4.8 years), partially offset by a shorter Logistics & Warehouse WALE (1.9 years).

Strategic portfolio progress into data centre assets

AIMS APAC REIT announced a new strategic portfolio positioning to expand into the data centre sector. Currently, it is exploring options to gain exposure in data centre assets. 

1. New South Wales (NSW) Government Investment Delivery Authority (IDA) Endorsement 

In April 2026, AIMS APAC 's two Australian business park assets at Macquarie Park and Bella Vista were endorsed by the NSW Investment Delivery Authority (IDA) for data centre development. 

The IDA assessed nearly A$92.6 billion worth of data centre proposals submitted to it  and endorsed 15 projects worth A$51.9 billion.

AIMS APAC REIT's two Australian assets at Macquarie Park and Bella Vista were among the 15 projects endorsed.  Other endorsed projects were sites owned by Microsoft, NEXTDC, Goodman and Stockland. The endorsement validates the strategic infrastructure attributes and location credentials of AIMS APAC REIT’s assets.

2. Acquisition strategy with data centre potential

Targeting land-rich industrial and business park acquisitions in close proximity to energy infrastructure.

3. JV and co-development partnership

Forming JV or co-development partnerships with institutional data centre operators, where AIMS APAC REIT contributes land and planning credentials while partners bring sector expertise, technology relationships and development capital.

4. NSW Renewable Energy Support

The IDA concurrently endorsed A$34 billion in renewable energy projects to address power supply constraints. 

Australia's Five Eyes security status and submarine cable connectivity to Asia and the US further underpins data sovereign demand.

The opportunity to add exposure into data centre is a positive catalyst in the medium term.  We view this strategic positioning as a meaningful potential catalyst for net asset value uplift and income growth over the medium term.

Maintain BUY and revise target price to S$1.65

As we rollover the forecast to financial year ending March 2027, we revise the target price to S$1.65, from S$1.60.

AIMS APAC REIT is trading at S$1.57, offering FY2027E distribution yield of 6.6%. This is higher than the sector average of 6.2%.  Given AIMS APAC REIT’s income visibility and resilient distribution, we expect the distribution yield to converge towards the sector average. 

At the target price S$1.65, AIMS APAC will be trading at FY2027E distribution yield of 6.3%, in-line with peers’ average. 

Key risks

Interest rate risk

The REIT is exposed to movements in interest rates, although 80% of its borrowings are on fixed rates as at 31 March 2026. Every 25bps increase in interest rates is estimated to have a 0.03 Singapore cents impact on annual DPU. The active management of debt maturities and hedging strategy will remain important, particularly with the S$250 million, 5.375% perpetual securities due for reset in September 2026 (being addressed through the two recent perpetual issuances).

FX translation risk

Approximately 23.5% of GRI is derived from Australian properties. The REIT hedges 69% of expected AUD distributable income on a rolling four-quarter basis via forward currency contracts. AUD weakness against SGD would adversely affect reported distributions.

Refinancing risk  

Approximately S$275 million in debt matures in FY2027. While the Manager is already in active discussions with lenders and this is the only near-term maturity cluster, a deterioration in credit markets or rising bank margins could increase refinancing costs.

Occupancy and tenant risk

Portfolio occupancy could be adversely impacted by weakening economic conditions, tenant downsizing or lease non-renewals. The multi-tenanted portfolio (57.6% of GRI) has higher turnover risk, though this is partly offset by 183 diversified tenants with over 80% in defensive industries.

Data centre execution risk

The data centre strategy — while strategically compelling — is at an early stage. Conversions of industrial or business park assets to data centres involve planning risk, capital expenditure, and execution uncertainty. The timeline to revenue contribution is likely two to four years for most sites.

Related links:

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

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