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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: 


AK71 said...

Prices and rentals of Singapore industrial spaces continued to rise in the first quarter of 2022, despite a dip in the overall occupancy rate, according to the quarterly market report published by JTC.

In Q1 2022, the overall occupancy rate fell to 89.8 per cent, a drop of 0.4 percentage points compared to the previous quarter, due to new completions picking up significantly, and increase in supply exceeding new demand.

Despite the drop in occupancy, price and rental indices of all industrial space rose by 2.1 per cent and 1.0 per cent respectively compared to the previous quarter.

AIMS APAC REIT reported higher FY22 gross revenue and net property income (NPI) of S$142.4 million and S$103.2 million, rising 16.1 per cent and 17.9 per cent year on year respectively.

Sabana Industrial Reit, in its Q1 2022 business update, reported healthy occupancy of 85.2 per cent and positive rental reversion of 4.0 per cent.

The Reit noted that this is the 8th quarter in the past 9 quarters where positive reversion was achieved.



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