AIMS AMP Capital Industrial REIT property at 20 Gul Way.AIMS AMP Capital Industrial REIT property at 20 Gul Way.

Singapore-listed industrial REIT, AIMS AMP Capital Industrial REIT, announced on 27 April that it has achieved a distribution per unit (DPU) of 2.95 Singapore cents for its 4Q 2016, an increase of 3.5% over the 2.92 cents paid in 4Q 2015.

The payment brought the full financial year’s DPU to 11.35 cents, an increase of 2.5% increase over FY2015’s DPU of 11.07 cents. Correspondingly gross revenue and net property income (NPI) for the financial year rose by 7.8% and 2.9% year-on-year.

“The higher gross revenue year-on-year was mainly contributed by our fully completed redevelopments of 20 Gul Way and 103 Defu Lane 10”, said Koh Wee Lih, CEO of the REIT’s manager. “Our focus on maintaining good tenant relationships and embarking on asset enhancement initiatives to unlock organic growth opportunities has also assisted our performance”, he added.

In the financial year, the REIT executed 64 new and renewal leases representing 138,201 square metres or 23% of net lettable area of the portfolio, at a weighted average rental increase of 9.5% on the renewals. The REIT has also extended the master leases of two substantial tenants, Sin Hwa Dee and Broadcom, ahead of their lease expiries in FY2017.

Aggregate leverage as at 31 March 2016 was at 32.4% with an overall blended funding cost of 4.2% per annum and a weighted average debt maturity of 2.2 years. Portfolio occupancy as at 31 March 2016 was at 93.4%, unchanged from the same period a year ago, while weighted average lease expiry (WALE) was at 2.93 years.

“However, moving forward, we expect the industrial leasing market to be challenging given the soft demand for industrial premises and oversupply situation in Singapore”, said Koh.

“As the industrial property market is expected to continue to be challenging, AIMS AMP Capital Industrial REIT remains cautious on the outlook of the industrial market and will continue to pro-actively manage [its]lease expiries", said the REIT.

Units of AIMS AMP Capital Industrial REIT last changed hands on the Singapore Exchange at SGD1.36.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.