On 31 July 2025, AIMS APAC REIT (“AA REIT”) announced their first quarter business update for FY2026. DPU saw a significant decrease when comparing quarter on quarter, attributable to higher property expenses. DPU is likely to remain at this level for a few more quarters until AA REIT complete the AEIs, which are estimated to be around the second quarter of FY2026.
Excluding the unfavorable decrease in DPU, the other financial position metrics remain relatively stable. There are currently no short-term refinancing risks, as AA REIT has disclosed that there are no debts maturing in FY2026.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
Website: REPL::General Announcement::First Quarter FY2026 Business Update
Photo source: https://www.aimsapacreit.com/
Financial Highlights
Distribution Per Unit (“DPU”)
| Metrics | Current | Previous |
|---|---|---|
| Distribution Per Unit | -9.9% | +5.4% |
| Rating | Unfavorable | Favorable |
For AA REIT, DPU disclosed are as follows:
- First Quarter of FY2026: SGD0.0228 per unit
- Fourth Quarter of FY2025: SGD0.0253 per unit
- Third Quarter of FY2025: SGD0.0240 per unit
- Second Quarter of FY2025: SGD0.0240 per unit
DPU for the first quarter of FY2026 has decreased by 9.9% to SGD0.0228 per unit from SGD0.0253 per unit in the previous quarter. This was contributed by a decrease in net property income with higher property expenses. The metric for this quarter shifted towards Unfavorable.
Occupancy
| Metrics | Current | Previous |
|---|---|---|
| Occupancy | 93.7% | 93.6% |
| Rating | Neutral | Neutral |
Occupancy rate as of 30 June 2025 has remained relatively unchanged at 93.7%. The metric remains Neutral as it is below my expected healthy occupancy rate of 95%.
Excluding the impact of AEIs and tenant movements, management disclosed that the committed leases occupancy rate remained healthy at 96.5%. Do note that this is not indicative of the entire portfolio, which is what unitholders are investing in when they purchase units of AA REIT.
Gearing ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing Ratio | 28.9% | 28.9% |
| Rating | Favorable | Favorable |
Gearing ratio as of 30 June 2025 remain unchanged at 28.9%. This metric remains as Favorable as there is more than sufficient headroom from the limit of 50% to fund new acquisitions through debt.
Do note that perpetual securities amounted to SGD497 million as of 31 March 2025. This is not included in the gearing ratio and is not a concern from the regulatory perspective as perpetual securities will not cause a breach in regulation and force AA REIT to take unfavorable measures. However, perpetual securities rank higher than unit holders should liquidation occur and has priority payment over distributions, something investors will need to keep in mind.
Interest coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest Coverage | 2.4x | 2.4x |
| Rating | Unfavorable | Unfavorable |
The adjusted interest coverage as of 30 June 2025, which includes the amount reserved for distribution to Perpetual Securities holders, remain unchanged at 2.4 times. The metric remains Unfavorable as it is significantly lower than my preference of 3.0 times.
Debt maturity profile
| Metrics | Current | Previous |
|---|---|---|
| Debt Maturity Profile | 2.7 years | 3.0 years |
| Rating | Favorable | Favorable |
Weighted average term to maturity of their debt as of 30 June 2025 have shortened to 2.7 years. The metric remains Favorable as there is sufficient time to refinance their debts, with no debt maturing in FY2026. Do note that approximately 35.2% of their debt will mature by the end of FY2027.
Price to Book Ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 1.11 | 1.03 |
| Rating | Neutral | Neutral |
The Price to Book (“P/B”) ratio became more expensive at 1.11. This is computed using the closing share price of SGD1.35 on 8 August 2025 and the net asset value per unit of SGD1.22 as of 30 June 2025. The P/B ratio is Neutral as you are paying a slight premium to its book-value.
As of 8 August 2025, the Market Capitalization is approximately SGD1,102 million.
Website: Yahoo Finance: AIMS APAC REIT (O5RU.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 5.34% | SGD 0.072 |
| 2024 | 6.95% | SGD 0.094 |
| 2023 | 7.33% | SGD 0.099 |
| 2022 | 6.97% | SGD 0.094 |
| 2021 | 7.19% | SGD 0.097 |
| 2020 | 6.30% | SGD 0.085 |
The dividend payout for the first 9 months of the calendar year 2025 is higher than the previous calendar year when annualized. As a conservative estimate, I estimated the dividend in the final quarter to be similar to the recent payout of SGD0.022 per unit, which will bring the total dividend payout to SGD0.094 per unit, similar to payout in the calendar year 2024 for computation.
With a closing share price of SGD1.35 as of 8 August 2025, this translates to a dividend yield of 6.95%. For my benchmark, a general reasonable yield would be around 4.75% and AA REIT have been consistently above throughout the years. The dividend yield is Favorable.
Website: Reasonable Dividend Yield 2025Q3 – 4.75%
Interest Rate Sensitivity
The Federal Reserve on 31 July 2025 have left its key short-term interest rate unchanged for the fifth time this year, at a range of 4.25% to 4.50%. Powell also signaled that it could take months for the Fed to determine whether Trump’s sweeping tariffs will push up inflation temporarily or lead to a more persistent bout of higher prices. His comments suggest that a rate cut in September, which had been expected by some economists and investors, is now less likely.
Website: Fed’s Powell sticks with patient approach to rate cuts, brushing off Trump’s demands
The Federal Reserve on 18 June 2025 have continued to keep interest rates unchanged at a range of 4.25% to 4.50%. The central bank’s latest outlook spells out a stagflation environment resulting from the import duties, with inflation heading higher even as overall growth trends lower.
Website: Federal Reserve leaves interest rates unchanged as it forecasts higher inflation
AA REIT have provided the interest rate sensitivity analysis as below. Should the interest rate change by another 1.0%, using FY2025 DPU of 9.60 cents as a base, DPU is expected to change by 1.3%.
| Change in Interest Rates | Change in DPU (cents) | Change as % of FY2025 DPU |
|---|---|---|
| 50 bps | 0.06 | 0.6% |
| 100 bps | 0.12 | 1.3% |
| 150 bps | 0.18 | 1.9% |
| 200 bps | 0.24 | 2.5% |
Key Things to Note
Tenant Concentration
Throughout the years, AA REIT is continuously increasing the customer base and reducing reliance on the top 10 tenants. As of quarter end, AA REIT currently has the top 10 tenants contributing to 49.9% of the total revenue, with Woolworths contributing to 12.3%, down from previous quarter of 13.0%. Based on the latest financial results the Woolworths Group is generating profits and cash flows and are unlikely to default on rent, AA REIT is now heavily reliant on a few customers for income. The tenant concentration is something investors should take note of.
Website: https://www.woolworthsgroup.com.au/
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Distribution Per Unit | -9.9% | Unfavorable |
| Occupancy | 93.7% | Neutral |
| Gearing Ratio | 28.9% | Favorable |
| Interest Coverage | 2.4x | Unfavorable |
| Debt Maturity Profile | 2.7 years | Favorable |
| Price to Book Ratio | 1.11 | Neutral |
| Overall | Neutral |
Overall, the metrics indicate that it has remained Neutral to invest in AA REIT. DPU has seen a significant decrease this quarter, with the impact from AEI and higher property expenses. The other components of the financial position of AA REIT remains relatively stable.
Background
AA REIT is a real estate investment trust listed on the Mainboard of the Singapore Exchange Securities Trading Limited. Their investment mandate is to invest in high quality income-producing industrial real estate throughout Asia Pacific, including warehousing and distribution activities, business park activities and manufacturing activities. The Trust’s portfolio consists of business parks and industrial properties.
The Trust is managed by AIMS AMP Capital Industrial REIT Management Limited.
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Website: AIMS APAC REIT (SGX: O5RU): 2025 Full Year Result
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