Posts
A DPU of 2.5c has been announced. The REIT goes XD on 2 Nov 2012 and the income distribution is payable on 20 Dec 2012.
Gearing is comfortable at 31.5%. This leaves ample debt headroom for further yield accretive initiatives.
The REIT now has a new source of funding via a $500m Medium Term Note Program. It issued a $100m 4 years 4.9% fixed rate notes due in August 2016. Being an unsecured facility, the cost of debt is dearer but if we should continue to see positive rental reversions, this is still acceptable.
Indeed, the REIT manager has not disappointed as they have been successful in renewing leases with higher weighted average rental with positive rental reversion of some 17.3%. They have also reduced concentration risk as the proportion of leases expiring by 2013 have reduced from 35.7% one year ago to 9.9%. Of course, it remains to be seen if they could secure positive rental reversions by renewing the 9.9% now remaining. Negotiations are in progress.
The management should also continue to work towards 100% occupancy although, at 99.2%, it is already above average for industrial properties in Singapore.
Average security deposit of 7.2 months per property provides a peace of mind.
In the papers, it is reported that distributable income reduced some 5.4% but on a quarter to quarter basis, the reduction is much lesser at 0.6%. So, I wouldn't be too worried.
Although gross property income improved some 3% quarter on quarter, NPI reduced 1.4% due to an increase of 13.9% in property operating expenses. This includes repair and maintenance of some properties which should be a one off expense. Having said this, the management should continue to be prudent in managing expenses.
See presentation slides: here.
See financial statement: here.
Related post:
AIMS AMP Capital Industrial REIT: 1Q FY2013.
Bloggy Award