Two master leases at Singaporean buildings are renewed by AA Reit

SINGAPORE – Aims Apac Reit (AA Reit) has extended the master lease term with Cargill’s chocolate maker Aalst Chocolate near Normanton Park for an additional ten years, as well as renewed the master lease with Japanese logistics business Kintetsu World Express (KWE) for a further five years.

According to Reit’s manager on January 8, as of the end of September 2023, the two floor plans accounted for roughly 6.6% of the gross rent throughout the entire portfolio.

By virtue of the two renewals, AA Reit’s portfolio weighted average lease expiry date will be extended from 4.2 years to 4.6 years by gross rental income.

The management pointed out that both leases were subject to price escalations and were signed at a positive rental reversion over their expiration rental rate.

The lease on the facility has been extended to December 31, 2028, by KWE, one of the top 10 tenants in the Reit. The property, which is located in the Jurong Innovation District and has a gross floor size of 68,190 square meters, will undergo exterior building enhancement work by AA Reit.

The date of the lease extension with Aalst Chocolate is April 18, 2035. This property is a two-story industrial building with 5,858 square meters of leasable area, situated within Jurong Industrial Estate. Since April 19, 2007, the chocolate producer and its parent business, Cargill, have leased space from Reit, according to the management.

“AA Reit will undertake electrical upgrading works in order to support Aalst Chocolate’s business requirements,” the manager continued.

The Reit manager’s CEO, Mr. Russell Ng, cited “the sustained demand” from the sector as evidence of the Reit’s solid tenant connections.

On January 8, the counter ended the day at $1.32, down one penny.

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Continue ReadingTwo master leases at Singaporean buildings are renewed by AA Reit

Three S-Reits that ignored the trend of raising DPUs

Most Singapore Reits that paid dividends for the fiscal year that finished on September 30, 2023, said that the distribution per unit (DPU) was smaller than the same time last year. Investment advice site Beansprout of Treasure at Tampines says that the smaller Treasure at Tampines floor plan is one reason why the share price of S-Reits has been going down.

High inflation and rising interest rates have been two things that have hurt REITS.

10-year US government bond yields have gone down since their high point in the middle of October. In the meantime, the Treasure at Tampines Showflat S-Reit Index has won 9.4% in total returns, bringing its year-to-date drop from 9.0% on October 31, 2023, to 0.4% on November 23, 2023.

Even though the business is facing problems, three S-Reits have reported better year-over-year DPU.

MLT maintained an occupancy rate of 96.9 percent but saw its average rental reversion dip to 0.2 percent from 4.2 percent in the previous quarter.

This was largely due to its Chinese properties within its portfolio.

However, MLT’s Reit manager continues to be active in capital recycling, with a total of five divestments announced in the second quarter in Malaysia, Singapore and Japan.

MLT also announced two more divestments in early November 2023, a property in Tuas Avenue 3 for S$11.1 million and two properties in Malaysia for RM151.2 million.

C2PU -0.28% for ParkwayLife Reit (PLife) said that its gross income for the first nine months of 2023 rose 24.6% year-over-year to S$110.9 million. This was due to higher rent from a new master lease deal for its three hospitals in Singapore and the purchase of five nursing homes in Japan.

Year over year, PLife’s NPI went up by 26.2% to S$104.5 million, and DPU went up by 2.8% to 10.99 cents. Two care homes in Japan were bought by PLife in October 2023 for about S$16.4 million. The boss of the Reit thinks that this will increase DPU.

Part of PLife’s plan to grow its assets and DPU, the company also wants to build up a third key market.

Since it went public for the first time in 2007, PLife has had steady repeating DPU growth.

Continue ReadingThree S-Reits that ignored the trend of raising DPUs