Discover SGX: 3 Reasons to Invest in AIMS APAC REIT

October 16, 2023

AIMS APAC REIT (SGX: O5RU) is a real estate investment trust (REIT) listed on SGX that invest in a diversified portfolio of high-quality income-producing logistics, business parks and industrial real estate throughout the Asia Pacific region.

Currently, AIMS APAC REIT has 25 properties in Singapore and 3 properties in Australia with a total asset of S$2.3 billion.

Here are 3 reasons to invest in AIMS APAC REIT.

1. Strong track record and strategic AEIs

AIMS APAC REIT stands out with robust operational results, boasting steady growth in occupancy and remarkable rent increases. It is not just about maintaining assets but elevating them.

The REIT announced that it will embark on two yield accretive asset enhancement initiatives (AEIs) later this year. The first project entails a substantial upgrade of an existing logistics asset to a prime logistics facility, which is witnessing higher demand and can command significantly increased rent. The second AEI focuses on repositioning an existing high-specification industrial asset, anticipated to lead to a 30% uplift in rent. These AEIs come with an estimated cost of S$32m and target a return on investment (ROI) of 7-8%.

Additionally, AIMS APAC REIT is in the process of assessing the redevelopment of an industrial asset located in Singapore’s JTC Food Zone, which could potentially yield a 90% increase in the existing Gross Floor Area (GFA).

2. Solid financials and room for growth

Financial stability? Check. Low gearing and no refinancing needs until FY 2025 signify a firm financial footing. As of 30 June 2023, AIMS APAC REIT’s gearing ratio stood at 32.9%, indicating that there is plenty of room for the REIT to grow. It is also not as severely affected by the rising interest rate environment.

Source: AIMS APAC REIT’s Q1 FY2024 Business Updates

The prudent use of recent fundraising proceeds to pare down debt further strengthens the balance sheet. Plus, there is ample room for strategic acquisitions, opening avenues for portfolio expansion and diversification.

3. Attractive valuation and promising future

AIMS APAC REIT is also trading at an attractive level.

At its current price, the REIT is trading at 0.78 times its book value, representing a discount of close to 20%.

It also offers an attractive 12-month forward dividend yield of 5.8%.

Positive long-term gain

While there are short-term risks, the future looks bright with anticipated long-term gains.

An impressive ESG score signifies a commitment to sustainability, potentially attracting a broader investor base.

The management’s optimism, despite economic uncertainties and sustained demand for quality assets from burgeoning sectors, underscores a positive outlook.

According to Wall Street Journal, there are 3 buy calls for AIMS APAC REIT with an average target price of S$1.48, representing an upside of 13.8%.

Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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