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AIMS AMP Capital Industrial REIT: 2Q2016 DPU 2.8c

Sunday, November 1, 2015

One of the few friends I have complained that I don't do quarterly reports on REITs anymore. I told him don't be lazy. Go see the presentations and financial statements published by the REITs. 

Don't rely on what bloggers write. Sometimes, we blog practically useless stuff and we are wrong many times too. Yes, even very eminent bloggers are not infallible. Don't think got bloggers means he no need to work as an investor, I told him.

So, why am I doing this? 

Well, a reader just asked me whether AIMS AMP Capital Industrial REIT is good to buy. I think must be a new reader because readers who have been following my blog know that I don't answer such questions with a 'yes' or 'no'.

Anyway, the reader read some disturbing headlines in the papers regarding AIMS AMP Capital Industrial REIT and wondered if it was a good investment. I gave him a link to the financial statement and said he should find out for himself. Don't rely on newspaper headlines.

AIMS AMP Capital Industrial REIT remains my biggest investment in the S-REIT universe. The REIT continues to do what I expect it to do which is to generate meaningful income for me in a sustainable manner. The fact that they are doing this while staying prudent in their finances makes me happy.

As shareholders, I have said before that we should be more concerned with performance on a per share basis. The fact that net property income (NPI) increases is meaningless if distribution per unit (DPU) should decrease and we have seen this happening with a couple of other REITs recently especially if they continue to distribute 100% of their distributable income.

AIMS AMP Capital Industrial REIT improved on their quarterly DPU and 2.8c per unit will be distributed on 23 December 2015. 

7.82% distirbution yield based on $1.42 unit price.

They did this while reducing gearing level to 30.9%. NAV per unit is $1.52.

Their interest cover ratio is at 4.8x which is healthy and they don't have any debt due till August 2016. Financially, the REIT is very sound.

AIMS AMP Capital Industrial REIT faces the same problem that all industrial landlords in Singapore do. There is more supply and, so, more competition for tenants but the REIT has been doing a very good job of getting new tenants and renewing leases at modestly higher rates. This is a sign of diligence and also competence.

There is no reason for me to reduce my investment in the REIT at this point in time as it continues to do the job I expect it to do and, in fact, if Mr. Market should go into a depression and decide to sell the REIT cheaply, all else remaining equal, I would probably buy more even though it is already my largest investment in S-REITs.

For now, I am looking forward to more passive income in December.

See presentation: here.
See financial statement: here.

Related posts:
1. AIMS AMP Capital Industrial REIT: Opinion.
2. 9M 2015 passive income from S-REITs.


Siew Mun said...

AK, I am not sure I misread. I was looking at their statement this morning. They have S$100 million Fixed Rate Notes @4.9% due Aug 2016(FY2017)on page 17 of 'FY2016:Second Quarter Financial Results' presenation.

AK71 said...

Hi Siew Mun,

Thank you for spotting this. I have made the correction. :D

Let us hope that they issue another round of 7 year Fixed Rate Notes with a lower interest rate. ;)

carol Chiam said...

Hi ak,
Im newbies to stock and and share im 29 this year thought of doing some investment.
Singapore saving bond is one of my list however return is low.
To invest 5-10k seem very little not much of a influence. My friend was telling me about 1 year unit trust or those 10years thing paying a fix of 750sgd.
Please advise me what is the best way for me.
Thank you very much.

AK71 said...

Hi Carol,

I am not going to give you any advice on how best to invest your money. I will ask you to consider investing in yourself first by picking up the relevant knowledge. ;)

I have provided a reading list here in my blog's right sidebar under the heading "Food for thought". If you are interested my journey, philosophy and methods, there are relevant links in the right sidebar too.

The stock market will always be there. :)

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