AIMS AMP Capital Industrial REIT: 3Q FY2012.

AIMS AMP Capital Industrial REIT delivered a solid set of results with DPU at 2.6c. This is a 4% increase over the previous quarter.

As I was expecting a DPU of 2.5c with a possibility of a small reduction, this is good news indeed. It will go XD on 3 Feb and is payable on 20 Mar.

Upon completion of sale of 31 Admiralty Road for $16.438m, the REIT's gearing would drop to 29.4%. The REIT had purchased this building for $13.4m. So, the REIT will recognise a gain and have gearing comfortably under 30% at the same time.

NAV per unit: $1.367
Interest cover ratio: 5.6x
Occupancy: 98.9%
Average land lease expiry: 41.9 years
(Only 10.9% of nett lettable area will see land lease expiry within the next 21 to 30 years).

The REIT has no debt due until October 2013.

Expectations for very slow growth in 2012 is unlikely to be too challenging as REITs are generally able to weather zero growth environments. The REIT also collects an average of 8.4 months in security deposits per property.

At the recent high of $1.00 per unit, its annualised distribution yield is 10.4%. This could increase in 2013, everything remaining equal.

I am confident of the REIT as a strong passive income generator and it remains a core component of my portfolio.

See presentation slides: here.

Related post:
AIMS AMP Capital Industrial REIT: Partial divestment.

FSL Trust: Reduced DPU to US0.10c.

Mr. Market is showing displeasure with FSL Trust's decision to reduce quarterly DPU from 0.95c to 0.1c. Its price has plunged more than 20% from the closing of 30c yesterday to 23c when I last looked.

Assuming an exchange rate of US$1 to S$1.30, the annualised distribution yield is about 2.2% per annum based on a unit price of 23c. Better than fixed deposit rates but as an investment, it is not very attractive.

However, I believe that this development together with the Trust's recent successful refinancing with a 6 year amortising loan are steps in the right direction. If the Trust survives the difficult times ahead, it could emerge stronger and ready to ride the next upswing in the cycle.

Read press release: here.