Simons Trading Research

Author: simonsg   |   Latest post: Fri, 13 Dec 2019, 4:31 PM


AIMS APAC REIT - Active Quarter

Author:   |    Publish date:

Recovery on Track; Raise DPU & Target Price

  • We raised DPUs by 0.5-2% on its recent Australian deal and following in-line 1Q20 - DPU was flat, but on better occupancies. AIMS APAC REIT (SGX:O5RU) has been active on leasing and AEI, but we expect negative reversions to persist in the near term – from earlier over-supply and unwinding of CWT’s master leases.
  • DPU recovery is on track, while redevelopment growth optionality from its under-utilised GFA continues to offer 4-5% potential upside risk.
  • Valuations are undemanding at 7+% DPU yield and 16% total return to our revised DDM-based SGD1.60 Target Price (COE: 7.8%, LTG: 1.5%).

In Line; Improved Occupancy

  • AIMS APAC REIT's 1Q20 revenue increased 5.8% y-o-y with higher rentals and recoveries at 20 Gul Way and 27 Penjuru Lane.
  • Portfolio occupancy rose from 94.0% to 94.7% while rental reversions at -0.1% improved from -5.8% in 4Q19, in line with a stabilising industrial market. Management signed 16 new and renewed leases for 31,630 sqm or 2.2% of its NLA and aims to backfill leases contributing 19-27% pa to expiries over FY20-22.
  • Its exposure to CWT at 8.8% of gross rental income is expected to fall as leases expire in 2HCY19, mostly at 20 Gul Way.

Lower AEI on Track

  • A 10-year master medical escalations and a 20-year SGD48.2m in development cost, which boosts 1.5x as plot 1H 2020.
  • Meanwhile, AEI works at NorthTech in Woodlands is on track to complete in 2H 2019.

Boardriders Opportunistic

  • AIMS APAC REIT completed the acquisition of Boardriders APAC HQ in Queensland for escalations. The property is fully-occupied debt-funded, thus adding 1-2% to our.
  • We are hopeful that management will scale up on its overseas AUM, on the back of more favourable asset-level fundamentals.

Source: Maybank Kim Eng Research - 25 Jul 2019

Share this

Related Stocks

Chart Stock Name Last Change Volume 
AIMS APAC Reit 1.41 +0.01 (0.71%) 315 

  Be the first to like this.


124  142  160  677 

Top 10 Active Counters
 Rex Intl 0.188+0.002 
 SunMoonFood 0.051+0.011 
 TEE Intl 0.058+0.003 
 YZJ Shipbldg SGD 1.10-0.03 
 Golden Agri-Res 0.215-0.005 
 Tritech 0.025+0.001 
 Interra Resou.. 0.065+0.004 
 Singapore-eDev 0.045+0.005 
 CapitaMall Trust 2.41-0.01 
 AusGroup^ 0.032-0.001 
Partners & Brokers