AIMS AMP Capital Industrial REIT (SGX: O5RU) is a  real estate investment trust that focuses on industrial properties in Singapore and the Asia Pacific.

Currently, the REIT owns 24 operational properties and has one and that’s under development. All of the REIT’s properties are located in Singapore as of now.

Performance

The REIT released its third quarter earnings yesterday and saw growth in its distributions.

For the nine months ended 31 Dec 2013,  the trust recorded  gross revenue of S$78.8m, up 15.4% compared to the corresponding period from a year ago. Similarly, its net property income improved 18.6% to S$52.6m.

The REIT’s distributable income had jumped some 22.6% year-on-year to S$41.6m but due to the increase in units outstanding, distributions per unit (DPU) only managed a relatively meagre 5.8% increase from a year ago to 8.02 Singapore cents.

Balance Sheet

AIMS AMP Capital Industrial REIT currently has an aggregate leverage of 26.5%, up from 25.2% since the previous quarter. The overall average funding cost for the trust is around 4.13% with an average debt maturity of 2.5 years.

Portfolio

48% of the REIT’s tenant base comes from companies that are involved with the logistics and warehousing industry. Some of the other industries that the REIT’s tenants come from include IT & electronics, pharmaceuticals, energy, and telecommunications.

The top 3 tenants for the REIT in terms its of rental income are CWT Ltd, Eurochem Corporation and Schenker Singapore.

Currently the Trust’s portfolio of industrial properties has an occupancy rate of 98.2% with an average lease of 2.9 years.

Going Forward

The Trust will focus on finding properties in Singapore that can give it good yields.

Furthermore, there are plans to unlock value in some of its properties. The REIT’s property at 103 Defu Lane 10, Singapore, is currently under redevelopment and is expected to receive its Temporary Occupation Permit in May 2014..

In light of that, the Defu Lane property should start contributing income to the trust by September 2014. The total cost for the redevelopment, including land costs, stands at around S$37.4m.

There are also plans to  undertake Phase 2E and 3 of the 20 Gul Way development in Singapore which might cost around S$77.15m. This development is projected to contribute an additional of 0.7 cents in DPU for the trust.

AIMS AMP Capital Industrial REIT has a net tangible asset per unit of S$ 1.52 and is selling for 0.95 times book value at its current price of S$1.445. The REIT’s also offering a yield of around 7.5% based on its annualised distributions for its current financial year.

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