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AIMS APAC REIT: Is gearing level too high?

Monday, May 23, 2022

I have decided to publish my reply in response to a reader's comment that AA REIT's gearing level is at 51% as a blog.

This is because I have received similar comments in recent months.

Having my response published as a blog will make it easier for me to point readers who leave me similar comments in the future to a ready response.

My reply:

Hi patrol, 

I don't know which piece of research that is but AA REIT's latest published gearing level dated 27 April was 37.5%. 

If you are referring to the perpetuals which AA REIT has on the balance sheet, there was a discussion in the comments section here in ASSI a few months ago in February. 

You might be interested to read those comments in this blog: 





Having said this, with interest rate rising, if AA REIT were to raise funds to strengthen its balance sheet, it isn't a bad idea. 

Unlike IREIT Global which retains 10% of its distributable income, AA REIT distributes 100% of its distributable income to investors. 

This is a reason why IREIT Global's balance sheet is so strong. 

In another conversation in the comments section, I said that if AA REIT were to take a leaf from IREIT Global's book and retained 10% of its distributable income, it might not be a bad idea too. 

I said a lot more in those comments like why I was reducing my investment in Centurion Corp. but didn't see a reason to do so for AA REIT yet. 

You might want to read those comments which you will find in this blog: 


You might also be interested in this blog: 





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