On 5 November 2025, AIMS APAC REIT (“AA REIT”) announced their half year result for FY2026. The quarter saw a notable increase in the gearing ratio, driven by additional borrowings drawn down during the period. At the same time, AA REIT redeemed SGD123 million of perpetual securities in the first half of FY2026. With total assets remaining relatively steady at approximately SGD2,280 million compared to the previous quarter, this suggests that the borrowings were used to fund the redemption—indicating a shift in AA REIT’s capital structure.
Excluding the above, there were no other significant changes noted during the quarter. Management has disclosed that AA REIT remains well poised to pursue opportunities for sustainable growth, and to capture demand in the region as tenants seek resilience in their supply chains.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only. It does not take into account your individual needs, investment objectives and specific financial circumstances.
Website: Financial Statements And Related Announcement::Half Yearly Results
Photo source: https://www.aimsapacreit.com/
Financial Highlights
Distribution Per Unit (“DPU”)
| Metrics | Current | Previous |
|---|---|---|
| Distribution Per Unit | +7.0% | -9.9% |
| Rating | Favorable | Unfavorable |
For AA REIT, DPU disclosed are as follows:
- Second Quarter of FY2026: SGD0.0244 per unit
- First Quarter of FY2026: SGD0.0228 per unit
- Fourth Quarter of FY2025: SGD0.0253 per unit
- Third Quarter of FY2025: SGD0.0240 per unit
DPU for the second quarter of FY2026 has increased by 7.0% to SGD0.0244 per unit from SGD0.0228 per unit in the previous quarter. The metric for this quarter shifted towards Favorable. Do note that revenue and net property income remain relatively unchanged quarter-on-quarter. This may be an indicator that the increase in DPU was not due to operations.
Occupancy
| Metrics | Current | Previous |
|---|---|---|
| Occupancy | 93.3% | 93.7% |
| Rating | Neutral | Neutral |
Occupancy rate as of 30 September 2025 has decreased to 93.3%. 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 95.1%. 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 | 35.0% | 28.9% |
| Rating | Favorable | Favorable |
Gearing ratio as of 30 September 2025 has increased to 35.0%. The increase was mainly due to the SGD150 million drawdown during the quarter as well as redemption of perpetual securities of SGD123 million during the first half of FY2026. 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 SGD372 million as of 30 September 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 | 2.5x | 2.4x |
| Rating | Unfavorable | Unfavorable |
The adjusted interest coverage as of 30 September 2025 remain relatively unchanged at 2.5 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 | 2.5 years | 2.7 years |
| Rating | Favorable | Favorable |
Weighted average term to maturity of their debt as of 30 September 2025 have shortened to 2.5 years. The metric remains Favorable as there is sufficient time to refinance their debts, with no debt maturing in FY2026. Do note that approximately 29.3% of their debt will mature by the end of FY2027.
Price to Book Ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 1.16 | 1.11 |
| Rating | Neutral | Neutral |
The Price to Book (“P/B”) ratio became more expensive at 1.16. This is computed using the closing share price of SGD1.42 per unit on 19 November 2025 and the net asset value of SGD1.22 per unit as of 30 September 2025. The P/B ratio is Neutral as you are paying a slight premium to its book-value.
As of 19 November 2025, the Market Capitalization is approximately SGD1,160 million.
Website: Yahoo Finance: AIMS APAC REIT (O5RU.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 6.80% | SGD 0.097 |
| 2024 | 6.61% | SGD 0.094 |
| 2023 | 6.97% | SGD 0.099 |
| 2022 | 6.63% | SGD 0.094 |
| 2021 | 6.83% | SGD 0.097 |
| 2020 | 5.99% | SGD 0.085 |
The total dividend payout for the calendar year 2025 amounted to SGD0.097 per unit. With a closing share price of SGD1.42 per unit as of 19 November 2025, this translates to a dividend yield of 6.80%. For my benchmark, a general reasonable yield would be around 4.25% and AA REIT have been consistently above throughout the years. The dividend yield is Favorable.
Website: Reasonable Dividend Yield 2025Q4 – 4.25%
Interest Rate Sensitivity
The Federal Reserve on 29 October 2025 approved its second straight interest rate cut, though Chair Jerome Powell rattled markets when he threw doubt on whether another reduction is coming in December. This lowers the benchmark overnight borrowing rate to a range of 3.75% to 4.00%.
Website: Fed cuts rates again, but Powell raises doubts about easing at next meeting
AA REIT have provided the interest rate sensitivity analysis where every 25-bps increase in interest rates is expected to have a 0.06 Singapore cents DPU impact per annum.
Should the interest rate change by 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 50.1% of the total revenue, with Woolworths contributing to 12.4%. 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 | +7.0% | Favorable |
| Occupancy | 93.3% | Neutral |
| Gearing Ratio | 35.0% | Favorable |
| Interest Coverage | 2.5x | Unfavorable |
| Debt Maturity Profile | 2.5 years | Favorable |
| Price to Book Ratio | 1.16 | Neutral |
| Overall | Neutral |
Overall, the metrics indicate that it has remained Neutral to invest in AA REIT. There are notable changes in capital structure, with the increase in gearing ratio and reduction in perpetual securities. The DPU impact of these changes will need to be assessed over the next few quarters.
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): 2026 First Quarter Business Update
