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AIMS APAC REIT - Maybank Research 2022-04-29: Resiliency And Growth

AIMS APAC REIT (SGX:O5RU) | SGinvestors.io AIMS APAC REIT (SGX:O5RU)

AIMS APAC REIT - Resiliency And Growth


High occupancy, recovering rents

  • AIMS APAC REIT (SGX:O5RU)’s FY22 DPU rose 5.7% y-o-y, underpinned by resilient portfolio occupancy, recovering rents and the Woolworths acquisition in Nov’21. The results were in line with consensus, and ahead of our estimate.
  • We see strong fundamentals ahead, given the higher Australian business park contributions and improving rental growth outlook for its Singapore industrial assets.



Improving demand, reversion strong at +14.7%

  • AIMS APAC REIT's portfolio occupancy was maintained at 97.6% in 4Q22, driven by strong leasing momentum at 5.9m sf (vs 6.1m sf in 3Q22). AIMS APAC REIT achieved a strong +14.7% rental reversion (vs +0.2% in 3Q22). llumina renewed its lease (at 29 Woodlands Industrial Park E1) for 10 years at a +16% reversion. This and others at 8 & 10 Pandan Crescent (at 4%-12%), helped to offset weaker reversion at 1A IBP (of -8%).
  • Management expects NPI to be cushioned from higher utility costs, as they are mostly passed through to tenants for its triple-net leases.


Australian contributions set to rise

  • Contributions from its Australian assets rose to ~13% of FY22 revenue (from ~3% in FY21), and made up 39.6% of AUM (from 21.8%) following the Woolworths acquisition, while the portfolio WALE increased to 5.05 years (from 4.85 years at end-Dec 2021).
  • We see sound growth fundamentals in Australia, with the assets anchored by its business parks (94% of Australian AUM). The properties are backed by resilient occupancies and built-in 2.75%-3.25% pa rental escalations for its two largest (blue-chip) tenants, which together contributed ~28% of gross rental income.

Sound balance sheet, cushioned from rising rates






Chua Su Tye Maybank Research | Li Jialin Maybank Research | https://www.maybank-ke.com.sg/ 2022-04-29
SGX Stock Analyst Report BUY MAINTAIN BUY 1.70 UP 1.650



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